CITIZENS BANCSHARES INC /OH/
S-4, 1998-03-04
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1998
                                                        REGISTRATION NO.
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
                                    FORM S-4
 
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
                           CITIZENS BANCSHARES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<CAPTION>
              OHIO                                           6022                                       34-1372535
<S>                              <C>                                                          <C>
(STATE OR OTHER JURISDICTION OF                       (PRIMARY STANDARD                              (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)              INDUSTRIAL CLASSIFICATION CODE NO.)                    IDENTIFICATION NO.)
</TABLE>
 
                  10 East Main Street, Salineville, Ohio 43945
                                 (330) 679-2328
   (ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
 
                                 Marty E. Adams
                              10 East Main Street
                            Salineville, Ohio 43945
                                 (330) 679-2328
 (NAME, ADDRESS, INCLUDING ZIP CODE & TELEPHONE NUMBER, INCLUDING AREA CODE OF
                               AGENT FOR SERVICE)
                            ------------------------
 
                                   COPIES TO:
 
                            M. Patricia Oliver, Esq.
                        Squire, Sanders & Dempsey L.L.P.
                                 4900 Key Tower
                               127 Public Square
                           Cleveland, Ohio 44114-1304
                            ------------------------
     Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
 
     If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
 
     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
 
     If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
         TITLE OF EACH                                    PROPOSED MAXIMUM       PROPOSED MAXIMUM
      CLASS OF SECURITIES            AMOUNT TO BE          OFFERING PRICE           AGGREGATE              AMOUNT OF
       TO BE REGISTERED             REGISTERED(1)           PER UNIT(2)         OFFERING PRICE(2)       REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                    <C>                    <C>                    <C>
Common Stock...................       2,150,889                68.27               146,841,192             43,318.15
===========================================================================================================================
</TABLE>
 
(1) Represents the estimated maximum number of common shares issuable by
    Citizens Bancshares, Inc. ("Bancshares") upon consummation of the merger of
    Century Financial Corporation ("Century") with and into Bancshares.
 
(2) Pursuant to Rule 457(f)(1) and 457(c), the registration fee for the
    Bancshares common shares as based on the average of the high and low sale
    prices of Century common stock on the Nasdaq NMS on February 27, 1998
    ($27.50), and computed based upon the estimated maximum number of such
    shares, including exercisable stock options (5,339,389) that may be
    exchanged for the securities being registered.
 
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
================================================================================
<PAGE>   2
 
                           CITIZENS BANCSHARES, INC.
                              10 EAST MAIN STREET
                            SALINEVILLE, OHIO 43945
 
                                            , 1998
 
To Our Shareholders:
 
     A special meeting (the "Bancshares Special Meeting") of shareholders of
Citizens Bancshares, Inc., a bank holding company organized and existing under
the laws of the State of Ohio ("Bancshares"), has been scheduled for [April 14,
1998] at   p.m. following adjournment of the Bancshares Annual Meeting of
Shareholders in the Raymond J. Lowry Auditorium of the Fred H. Johnson Building,
10 East Main Street, Salineville, Ohio 43945. The accompanying Notice of the
Bancshares Special Meeting, Joint Proxy Statement/Prospectus and Proxy Card set
forth the formal business to be transacted at the Special Meeting. I encourage
you to review these materials and to attend the Bancshares Special Meeting.
 
     At the Bancshares Special Meeting, holders of Bancshares common shares,
without par value, are being asked to consider and vote upon a proposal (the
"Merger Proposal") to adopt the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of December 3, 1997, by and between Century Financial
Corporation ("Century") and Bancshares, providing for the merger (the "Merger")
of Century with and into Bancshares, and to approve the transactions
contemplated thereby. In the Merger, each outstanding share of common stock of
Century will be converted into common shares, without par value, of Bancshares
in accordance with the conversion ratio set forth in the Merger Agreement and
described in the accompanying Joint Proxy Statement/Prospectus (with cash paid
in lieu of fractional shares).
 
     In connection with the Merger Proposal, Bancshares shareholders are also
being asked to consider and vote upon a proposal to amend the Articles of
Incorporation of Bancshares to increase the authorized number of common shares
to 36,000,000 (the "Articles Amendment") and to amend Section Seven of the
Bancshares Code of Regulations to increase the number of directors of the
Bancshares Board of Directors at no fewer than nine (9) members and no more than
twenty-one (21) members and fix the size of the Board of Directors at twenty-one
(21) members (the "Regulations Amendment").
 
     Consummation of the Merger is subject to certain conditions, including, but
not limited to, obtaining the requisite vote of the shareholders of Bancshares
and Century and the approval of the Merger by various regulatory agencies.
 
     THE BANCSHARES BOARD OF DIRECTORS HAS UNANIMOUSLY CONCLUDED THAT THE
MERGER, THE ARTICLES AMENDMENT AND THE REGULATIONS AMENDMENT ARE FAIR TO, AND IN
THE BEST INTERESTS OF, THE BANCSHARES SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THE MERGER PROPOSAL, THE ARTICLES AMENDMENT AND THE
REGULATIONS AMENDMENT.
 
     Bancshares' financial advisor, Sandler O'Neill & Partners, L.P., has
rendered an opinion dated             , 1998, the date of this Joint Proxy
Statement Prospectus, to the Bancshares Board of Directors to the effect that,
as of the date hereof, and based upon and subject to certain matters stated in
such opinion, the conversion ratio contemplated by the Merger Agreement is fair
to Bancshares from a financial point of view.
 
     If the accompanying Proxy Card is executed properly and returned to
Bancshares in time to be voted at the Bancshares Special Meeting, the shares
represented thereby will be voted in accordance with the instructions marked
thereon. Executed but unmarked proxies will be voted for approval of the Merger
Proposal, for the Articles Amendment and for the Regulations Amendment. The
presence of a shareholder at the Bancshares Special Meeting will not
automatically revoke such shareholder's proxy. A Bancshares shareholder may,
however, revoke a proxy at any time prior to its exercise by filing a written
notice of revocation with or delivering a duly executed proxy bearing a later
date to Tracey L. Reeder, Citizens Bancshares, Inc., 10 East Main Street,
Salineville, Ohio 43945 or by attending the Bancshares Special Meeting and
advising the Secretary of the shareholder's intent to vote the shares.
<PAGE>   3
 
     Approval of the Merger Proposal requires the affirmative vote of the
holders of two-thirds of the outstanding common shares of Bancshares. Approval
of both the Articles Amendment and the Regulations Amendment requires the
affirmative vote of the holders of a majority of the outstanding common shares
of Bancshares. Accordingly, it is very important that your shares be represented
at the Bancshares Special Meeting. I urge you to vote FOR the Merger Proposal,
FOR the Articles Amendment and FOR the Regulations Amendment, and to sign, date
and return the accompanying Proxy Card as soon as possible, even if you plan to
attend the Bancshares Special Meeting. This procedure will not prevent you from
voting in person, but will ensure that your vote is counted if you are unable to
attend.
 
                                            Very truly yours,
 
                                            Marty E. Adams
                                            President and Chief Executive
                                            Officer
 
                             YOUR VOTE IS IMPORTANT
 WE ENCOURAGE YOU TO SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
    ENVELOPE REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE BANCSHARES SPECIAL
                                    MEETING.
<PAGE>   4
 
                           CITIZENS BANCSHARES, INC.
                              10 EAST MAIN STREET
                            SALINEVILLE, OHIO 43945
 
                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
 
                                            , 1998
 
To the Shareholders of Citizens Bancshares, Inc.:
 
     A special meeting (including any adjournments or reschedulings thereof, the
"Bancshares Special Meeting") of shareholders of Citizens Bancshares, Inc., a
bank holding company organized and existing under the laws of the State of Ohio
("Bancshares"), will be held on [April 14, 1998] at   p.m., following the
adjournment of the Bancshares Annual Meeting of Shareholders, in the Raymond J.
Lowry Auditorium of the Fred H. Johnson Building, 10 East Main Street,
Salineville, Ohio 43945. A Proxy Card and Joint Proxy Statement/Prospectus for
the Bancshares Special Meeting are enclosed.
 
     The Bancshares Special Meeting is for the purpose of considering and voting
upon proposals to:
 
          Adopt the Agreement and Plan of Merger (the "Merger Agreement"), dated
     as of December 3, 1997, by and between Century Financial Corporation
     ("Century") and Bancshares providing for the merger (the "Merger") of
     Century with and into Bancshares, and approve the transactions contemplated
     thereby (the "Merger Proposal"). A copy of the Merger Agreement is attached
     as Appendix A to the accompanying Joint Proxy Statement/Prospectus.
 
          Amend the Articles of Incorporation of Bancshares to increase the
     number of authorized common shares to 36,000,000 (the "Articles
     Amendment").
 
          Amend Section Seven of the Bancshares Code of Regulations to increase
     the number of directors on the Bancshares Board of Directors at no fewer
     than nine (9) members and no more than twenty-one (21) members and fix the
     size of the Board of Directors at twenty-one (21) members (the "Regulations
     Amendment").
 
     No other business will be transacted at the Bancshares Special Meeting
other than possible adjournments or reschedulings thereof.
 
     THE BANCSHARES BOARD OF DIRECTORS HAS UNANIMOUSLY CONCLUDED THAT THE MERGER
PROPOSAL, THE ARTICLES AMENDMENT AND THE REGULATIONS AMENDMENT ARE IN THE BEST
INTERESTS OF THE BANCSHARES SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR THE MERGER PROPOSAL, FOR THE ARTICLES AMENDMENT AND FOR THE REGULATIONS
AMENDMENT.
 
     In the event that there are not sufficient votes to approve the adoption of
the Merger Proposal, the Articles Amendment and the Regulations Amendment at the
time of the Bancshares Special Meeting, such proposal could not be approved
unless the Bancshares Special Meeting is adjourned in order to permit further
solicitation of proxies. In order to allow proxies that have been received by
Bancshares at the time of the Bancshares Special Meeting to be voted for such
adjournment, if necessary, Bancshares has submitted the question of adjournment
under such circumstances to its shareholders as a separate matter for their
consideration. A majority of the shares represented and voting at the Bancshares
Special Meeting is required in order to approve any such adjournment. The Board
of Directors of Bancshares recommends that shareholders vote their proxies in
favor of such adjournment so that their proxies may be used for such purposes in
the event it should become necessary. Properly executed proxies will be voted in
favor of any such adjournment unless otherwise indicated thereon. If it is
necessary to adjourn the Bancshares Special Meeting, no notice of the time and
place of the adjourned meeting is required to be given to shareholders other
than an announcement of such time and place at the Bancshares Special Meeting.
<PAGE>   5
 
     The Board of Directors of Bancshares has fixed the close of business on
March 2, 1998 as the record date for determination of the shareholders of
Bancshares entitled to notice of and to vote at the Bancshares Special Meeting.
 
     It is very important that your shares be represented at the Bancshares
Special Meeting. You are urged to complete and sign the accompanying Proxy Card,
which is solicited by the Board of Directors of Bancshares, and to mail it
promptly in the enclosed envelope. All proxies are important, so please complete
each Proxy Card sent to you and return it in the envelope provided.
 
                                          Marty E. Adams
                                          President and Chief Executive Officer
<PAGE>   6
 
                         CENTURY FINANCIAL CORPORATION
                               ONE CENTURY PLACE
                         ROCHESTER, PENNSYLVANIA 15074
 
                                            , 1998
 
To Our Shareholders:
 
     A special meeting (the "Century Special Meeting") of shareholders of
Century Financial Corporation, a bank holding company organized and existing
under the laws of the Commonwealth of Pennsylvania ("Century"), has been
scheduled for [April 15, 1998] at 11:00 a.m. at the Beaver Valley Country Club,
Patterson Heights, Beaver Falls, Pennsylvania 15010. The accompanying Notice of
the Century Special Meeting, Joint Proxy Statement/Prospectus and Proxy Card set
forth the formal business to be transacted at the Century Special Meeting. I
encourage you to review these materials and to attend the Century Special
Meeting.
 
     At the Century Special Meeting, holders of Century common stock, par value
$.835 per share, are being asked to consider and vote upon a proposal (the
"Merger Proposal") to adopt the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of December 3, 1997, by and between Century and Citizens
Bancshares, Inc. ("Bancshares"), providing for the merger (the "Merger") of
Century with and into Bancshares, and to approve the transactions contemplated
thereby. In the Merger, each outstanding share of common stock of Century will
be converted into common shares, without par value, of Bancshares in accordance
with the conversion ratio set forth in the Merger Agreement and described in the
accompanying Joint Proxy Statement/Prospectus (with cash paid in lieu of
fractional shares).
 
     Consummation of the Merger is subject to certain conditions, including, but
not limited to, obtaining the requisite vote of the shareholders of Century and
Bancshares and the approval of the Merger by various regulatory agencies.
 
     THE CENTURY BOARD OF DIRECTORS HAS UNANIMOUSLY CONCLUDED THAT THE MERGER IS
FAIR TO, AND IN THE BEST INTERESTS OF, CENTURY AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.
 
     Century's financial advisor, Danielson Associates, Inc., has rendered an
opinion dated November 17, 1997, and updated to the date hereof, to the Century
Board of Directors to the effect that, as of the date hereof and based upon and
subject to certain matters stated in such opinion, the Merger contemplated by
the Merger Agreement is fair to the shareholders of Century from a financial
point of view.
 
     If the accompanying Proxy Card is executed properly and returned to Century
in time to be voted at the Century Special Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon.
Executed but unmarked proxies will be voted for approval of the Merger Proposal.
The presence of a shareholder at the Century Special Meeting will not
automatically revoke such shareholder's proxy. A Century shareholder may,
however, revoke a proxy at any time prior to its exercise by filing a written
notice of revocation with or delivering a duly executed proxy bearing a later
date to Anita J. Reese, AVP, Administration and Assistant Corporate Secretary,
Century Financial Corporation, One Century Place, Rochester, Pennsylvania 15074
or by attending the Century Special Meeting and advising the Secretary of the
shareholder's intent to vote the shares.
<PAGE>   7
 
     Approval of the Merger Proposal requires the affirmative vote of the
holders of a majority of the outstanding common shares of Century. Accordingly,
it is very important that your shares be represented at the Century Special
Meeting. I urge you to vote FOR the Merger Proposal and to sign, date and return
the accompanying Proxy Card as soon as possible, even if you plan to attend the
Century Special Meeting. This procedure will not prevent you from voting in
person, but will ensure that your vote is counted if you are unable to attend.
 
                                            Very truly yours,
 
                                            Joseph N. Tosh, II
                                            President and Chief Executive
                                            Officer
 
                             YOUR VOTE IS IMPORTANT
 WE ENCOURAGE YOU TO SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
    ENVELOPE REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE BANCSHARES SPECIAL
                                    MEETING.
<PAGE>   8
 
                         CENTURY FINANCIAL CORPORATION
                               ONE CENTURY PLACE
                         ROCHESTER, PENNSYLVANIA 15074
 
                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
 
                                            , 1998
 
To the Shareholders of Century Financial Corporation:
 
     A special meeting (including any adjournments or reschedulings thereof, the
"Century Special Meeting") of shareholders of Century Financial Corporation, a
bank holding company organized and existing under the laws of the Commonwealth
of Pennsylvania ("Century"), will be held on [April 15, 1998] at 11:00 a.m. at
the Beaver Valley Country Club, Patterson Heights, Beaver Falls, Pennsylvania
15010. A Proxy Card and Joint Proxy Statement/Prospectus for the Century Special
Meeting are enclosed.
 
     The Special Meeting is for the purpose of considering and voting upon a
proposal (the "Merger Proposal") to:
 
          Adopt the Agreement and Plan of Merger (the "Merger Agreement"), dated
     as of December 3, 1997, by and between Century and Citizens Bancshares,
     Inc. ("Bancshares") providing for the merger (the "Merger") of Century with
     and into Bancshares, and approve the transactions contemplated thereby. A
     copy of the Merger Agreement is attached as Appendix A to the accompanying
     Joint Proxy Statement/Prospectus.
 
     THE CENTURY BOARD OF DIRECTORS HAS UNANIMOUSLY CONCLUDED THAT THE MERGER IS
IN THE BEST INTERESTS OF CENTURY AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR THE PROPOSAL.
 
     In the event that there are not sufficient votes to approve the adoption of
the Merger Proposal at the time of the Century Special Meeting, such proposal
could not be approved unless the Century Special Meeting is adjourned in order
to permit further solicitation of proxies. In order to allow proxies that have
been received by Century at the time of the Century Special Meeting to be voted
for such adjournment, if necessary, Century has submitted the question of
adjournment under such circumstances to its shareholders as a separate matter
for their consideration. A majority of the shares represented and voting at the
Century Special Meeting is required in order to approve any such adjournment.
The Board of Directors of Century recommends that shareholders vote their
proxies in favor of such adjournment so that their proxies may be used for such
purposes in the event it should become necessary. Properly executed proxies will
be voted in favor of any such adjournment unless otherwise indicated thereon. If
it is necessary to adjourn the Century Special Meeting and the adjournment is
for a period of less than thirty days, no notice of the time and place of the
adjourned meeting is required to be given to shareholders other than an
announcement of such time and place at the Century Special Meeting.
 
     The Board of Directors of Century has fixed the close of business on March
2, 1998 as the record date for determination of the shareholders of Century
entitled to notice of and to vote at the Century Special Meeting.
 
     It is very important that your shares be represented at the Century Special
Meeting. You are urged to complete and sign the accompanying Proxy Card, which
is solicited by the Board of Directors of Century, and to mail it promptly in
the enclosed envelope. All proxies are important, so please complete each Proxy
Card sent to you and return it in the envelope provided.
 
                                            Joseph N. Tosh, II
                                            President and Chief Executive
                                            Officer
<PAGE>   9
 
<TABLE>
<S>                                                  <C>
                  PROXY STATEMENT                                      PROXY STATEMENT
                        OF                                                   OF
             CITIZENS BANCSHARES, INC.                          CENTURY FINANCIAL CORPORATION
          SPECIAL MEETING OF SHAREHOLDERS                      SPECIAL MEETING OF SHAREHOLDERS
                 [APRIL 14, 1998]                                     [APRIL 15, 1998]
</TABLE>
 
                                   PROSPECTUS
 
                           CITIZENS BANCSHARES, INC.
                            2,150,889 COMMON SHARES
 
    This Joint Proxy Statement/Prospectus is being furnished to shareholders of
record on March 2, 1998 of Citizens Bancshares, Inc., a bank holding company
organized and existing under the laws of the State of Ohio ("Bancshares"), and
shareholders of record on March 2, 1998 of Century Financial Corporation, a bank
holding company organized and existing under the laws of the Commonwealth of
Pennsylvania ("Century"), in connection with the solicitation of proxies by
Bancshares and Century for use at the special meetings of their respective
shareholders (the "Special Meetings"). The Special Meeting of Bancshares (the
"Bancshares Special Meeting") is to be held in the Raymond J. Lowry Auditorium
of the Fred H. Johnson Building, 10 East Main Street, Salineville, Ohio 43945 on
[April 14, 1998] at   p.m., local time, following adjournment of the Bancshares
Annual Meeting of Shareholders, and at any adjournment or adjournments of the
meeting. The Special Meeting of Century (the "Century Special Meeting") is to be
held at the Beaver Valley Country Club, Patterson Heights, Beaver Falls,
Pennsylvania 15010 on [April 15, 1998] at 11:00 a.m., local time, and at any
adjournment or adjournments of the meeting.
 
    At the Bancshares Special Meeting, Bancshares shareholders will be asked to
approve the following:
 
        An Agreement and Plan of Merger, dated as of December 3, 1997 (the
    "Merger Agreement"), by and between Century and Bancshares, and the
    transactions contemplated thereby, including the merger of Century with and
    into Bancshares (the "Merger"). A copy of the Merger Agreement is attached
    to this Joint Proxy Statement/Prospectus as Appendix A and is incorporated
    herein by reference.
 
        An amendment to the Articles of Incorporation of Bancshares to increase
    the authorized number of common shares to 36,000,000 (the "Articles
    Amendment").
 
        An amendment to Section Seven of the Code of Regulations of Bancshares
    to increase the number of directors at no fewer than nine (9) members and no
    more than twenty-one (21) members and to fix the size of the Board of
    Directors at twenty-one (21) members (the "Regulations Amendment").
 
    At the Century Special Meeting, Century shareholders will be asked to
approve an Agreement and Plan of Merger, dated as of December 3, 1997 (the
"Merger Agreement"), by and between Century and Bancshares, and the transactions
contemplated thereby, including the merger of Century with and into Bancshares
(the "Merger"). A copy of the Merger Agreement is attached to this Joint Proxy
Statement/Prospectus as Appendix A and is incorporated herein by reference.
 
    The shares of Bancshares and Century represented by proxy will be voted at
the respective Special Meetings as specified by the respective shareholders of
Bancshares and Century. In the case of Bancshares, executed but unmarked proxies
will be voted FOR approval of the Merger, FOR approval of the Articles Amendment
and FOR approval of the Regulations Amendment. In the case of Century, executed
but unmarked proxies will be voted FOR the Merger. Upon consummation of the
Merger, each outstanding share of common stock of Century, par value $.835
(collectively, the "Century Common Shares"), other than shares held by
shareholders who exercise their right to be dissenting shareholders, will be
converted into 0.425 common shares of Bancshares, without par value ("Bancshares
Common Shares"), upon the terms and subject to certain adjustments based on the
then current closing price of Bancshares Common Shares on the Nasdaq National
Market System as set forth in the Merger Agreement (the "Conversion Ratio").
Dissenters' rights are described in the section entitled "PROPOSED
MERGER -- Rights of Dissenting Bancshares Shareholders and Rights of Assenting
Century Shareholders." For a more detailed description of the Merger Agreement,
the terms of the Merger and the Conversion Ratio, see "PROPOSED MERGER."
 
    This Joint Proxy Statement/Prospectus constitutes the Proxy Statement of
Century and the Proxy Statement of Bancshares and the Prospectus of Bancshares
covering the Bancshares Common Shares to be issued pursuant to the Merger.
 
    This Joint Proxy Statement/Prospectus and the accompanying Proxy Cards are
first being mailed to Bancshares shareholders on or about              , 1998,
and to the Century shareholders on or about              , 1998.
 
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN MATTERS THAT THE SHAREHOLDERS OF
BANCSHARES AND CENTURY SHOULD CAREFULLY CONSIDER IN DETERMINING WHETHER TO VOTE
  TO APPROVE THE MERGER AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED THEREBY,
                             INCLUDING THE MERGER.
 
   THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
   OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
  FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND, THE SAVINGS
          ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
 
    THE SECURITIES TO BE OFFERED IN CONNECTION WITH THE MERGER HAVE NOT BEEN
 APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
 REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE REGULATORY AUTHORITY
   PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS
     PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
  The date of this Joint Proxy Statement/Prospectus is                , 1998.
<PAGE>   10
 
                             AVAILABLE INFORMATION
 
     Bancshares and Century are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith file reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by Bancshares and/or Century can be inspected and copied at the public
reference facilities maintained by the Commission in Washington, D.C., and at
its Regional Office located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material can also be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission also maintains a Web
site that contains reports, proxy statements and other information filed
electronically by Bancshares and Century. The Commission's Internet address is
http://www.sec.gov. Bancshares Common Shares and Century Common Shares are
quoted on the Nasdaq National Market and reports, proxy statements and other
information concerning Bancshares and Century are available for inspection and
copying at prescribed rates at the office of the National Association of
Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006.
 
     Bancshares has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act of 1933, as amended (the "1933 Act"), covering the
Bancshares Common Shares to be issued in connection with the Merger. This Joint
Proxy Statement/Prospectus was filed with the Registration Statement as the
Prospectus of Bancshares; however, it does not contain all of the information
set forth in the Registration Statement. The Registration Statement and the
exhibits thereto can be inspected at the Commission's public reference room,
Room 1024, 450 5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549, as
well as the Commission's Regional Office listed above.
 
     THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE
AVAILABLE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM
THIS JOINT PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST, WITH RESPECT TO BANCSHARES, FROM TRACEY L. REEDER, ASSISTANT CORPORATE
SECRETARY, CITIZENS BANCSHARES, INC., 10 EAST MAIN STREET, SALINEVILLE, OHIO
43945, (330) 679-2328, AND WITH RESPECT TO CENTURY, FROM DONALD A. BENZIGER,
SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND CORPORATE SECRETARY, CENTURY
FINANCIAL CORPORATION, ONE CENTURY PLACE, ROCHESTER, PENNSYLVANIA 15074, (412)
774-1872. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE [INSERT DATE THAT IS FIVE (5) BUSINESS DAYS PRIOR TO THE
RESPECTIVE SPECIAL MEETINGS.]
 
     No person has been authorized to give any information or make any
representations not contained herein, and, if given or made, such information or
representation must not be relied upon as having been authorized. This Joint
Proxy Statement/Prospectus does not constitute an offer to sell any securities
other than the securities to which it relates or an offer to sell any securities
covered by this Joint Proxy Statement/Prospectus in any jurisdiction where, or
to any person to whom, it is unlawful to make such an offer. Neither the
delivery hereof nor any distribution of securities by Bancshares made hereunder
shall, under any circumstances, create an implication that there has been no
change in the facts herein set forth since the date hereof.
 
     All information concerning Bancshares contained in this Joint Proxy
Statement/Prospectus has been furnished by Bancshares and all information
concerning Century has been furnished by Century.
 
                           INCORPORATION BY REFERENCE
 
     The following documents filed with the Commission under the 1934 Act by
Bancshares are incorporated by reference into this Joint Proxy
Statement/Prospectus: (a) Bancshares' annual report on Form 10-K for the year
ended December 31, 1997; (b) Bancshares' current report on Form 8-K, dated
January 2, 1998; (c) Bancshares 1997 Annual Report to Shareholders and (d)
Bancshares Schedule 13D filed with the Commission on November 26, 1997.
 
     Century's annual report on Form 10-K for the year ended December 31, 1997
filed with the Commission under the 1934 Act is incorporated by reference into
this Joint Proxy Statement/Prospectus.
 
                                        i
<PAGE>   11
 
     All documents filed by Bancshares and/or Century pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Joint Proxy
Statement/Prospectus and prior to the date of their respective Special Meetings
shall be deemed to be incorporated by reference in this Joint Proxy
Statement/Prospectus and to be a part hereof from the date of filing such
documents.
 
     Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Joint Proxy Statement/Prospectus to the extent that a
statement contained herein or in any other subsequently filed document that is
also deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Joint Proxy
Statement/Prospectus.
 
     The information relating to Bancshares and Century contained in this Joint
Proxy Statement/Prospectus should be read together with the information in the
documents incorporated by reference.
 
     THIS JOINT PROXY STATEMENT/PROSPECTUS CONTAINS CERTAIN FORWARD LOOKING
STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
BUSINESS OF BANCSHARES FOLLOWING THE CONSUMMATION OF THE MERGER. THESE FORWARD
LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(1) EXPECTED COST SAVINGS FROM THE MERGER CANNOT BE FULLY REALIZED; (2) DEPOSIT
ATTRITION, CUSTOMER LOSS OR REVENUE LOSS FOLLOWING THE MERGER IS GREATER THAN
EXPECTED (3) COMPETITIVE PRESSURE IN THE BANKING INDUSTRY INCREASES
SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE
BUSINESSES OF BANCSHARES AND CENTURY ARE GREATER THAN EXPECTED; (5) CHANGES IN
THE INTEREST RATE ENVIRONMENT THAT MAY REDUCE MARGINS; AND (6) GENERAL ECONOMIC
CONDITIONS, EITHER NATIONALLY OR IN THE AREA IN WHICH THE COMBINED COMPANY WILL
BE DOING BUSINESS, ARE LESS FAVORABLE THAN EXPECTED. FURTHER INFORMATION ON
OTHER FACTORS THAT COULD AFFECT THE FINANCIAL RESULTS OF BANCSHARES AFTER THE
MERGER IS INCLUDED IN THE COMMISSION FILINGS INCORPORATED BY REFERENCE HEREIN.
 
                                       ii
<PAGE>   12
 
                         CENTURY FINANCIAL CORPORATION
                           CITIZENS BANCSHARES, INC.
                        JOINT PROXY STATEMENT/PROSPECTUS
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
AVAILABLE INFORMATION.......................................       i
INCORPORATION BY REFERENCE..................................       i
SUMMARY.....................................................       1
RISK FACTORS................................................      10
BANCSHARES SELECTED FINANCIAL DATA..........................      11
CENTURY SELECTED FINANCIAL DATA.............................      12
PRO FORMA SELECTED FINANCIAL INFORMATION....................      13
COMPARATIVE PER SHARE DATA..................................      14
COMPARATIVE MARKET VALUE DATA...............................      15
INFORMATION CONCERNING THE BANCSHARES SPECIAL MEETING.......      16
  General...................................................      16
  Solicitation, Voting and Revocability of Proxies..........      16
  Matters to be Considered at the Bancshares Special
     Meeting................................................      17
INFORMATION CONCERNING THE CENTURY SPECIAL MEETING..........      19
  General...................................................      19
  Solicitation, Voting and Revocability of Proxies..........      19
PROPOSED MERGER.............................................      21
  Century Background and Reasons for the Merger.............      21
  Recommendation of the Century Board of Directors..........      22
  Opinion of Century's Financial Advisor....................      23
  Bancshares Background and Reasons for the Merger..........      25
  Recommendation of the Bancshares' Board of Directors......      25
  Opinion of Bancshares' Financial Advisor..................      25
  Description of the Merger.................................      29
  Consideration for Century Common Shares...................      30
  Payment of Cash in Lieu of Fractional Shares..............      30
  Century Stock Options.....................................      30
  Other Provisions of the Merger Agreement..................      30
     Representations and Warranties.........................      30
     Conditions to the Merger...............................      31
     Amendments; Termination................................      31
  Federal Income Tax Consequences of the Merger.............      32
  Accounting Treatment......................................      32
  Interest of Century Management in the Merger..............      32
  Expenses of the Merger....................................      33
  Regulatory Approvals......................................      33
  Effective Time of the Merger..............................      33
  Operations of Century After the Merger....................      33
  Business Pending the Merger...............................      34
  Stock Option Agreement....................................      34
  Surrender of Certificates.................................      35
  Resale of Bancshares Common Shares........................      35
  Rights of Dissenting Bancshares Shareholders..............      36
  Rights of Dissenting Century Shareholders.................      36
</TABLE>
 
                                       iii
<PAGE>   13
 
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
DESCRIPTION OF BANCSHARES CAPITAL SHARES....................      37
  General...................................................      37
  Description of Control Share Acquisition Provisions.......      38
     Procedures.............................................      38
     Requirements for Approval..............................      39
     Violation of Restriction...............................      39
COMPARATIVE RIGHTS OF BANCSHARES AND CENTURY SHAREHOLDERS...      39
  Introduction..............................................      39
  Authorized Shares.........................................      39
  Certain Voting Rights.....................................      40
  Preemptive Rights.........................................      40
  Cumulative Voting.........................................      40
  Special Meetings of Shareholders..........................      40
  Amendment of Corporate Governing Documents................      40
  Liability and Indemnification of Officers and Directors...      41
  Classification of Board of Directors......................      42
  Removal of Directors......................................      42
  Payment of Dividends......................................      43
  Anti-Takeover Statutes....................................      43
PRO FORMA FINANCIAL INFORMATION.............................      44
INFORMATION WITH RESPECT TO BANCSHARES......................      57
  Business..................................................      57
  Year 2000.................................................      57
  Supplementary Financial Information.......................      58
  Management's Discussion and Analysis of Financial
     Condition and Results of Operations for the Year Ended
     December 31, 1997......................................      59
     Recent Developments....................................      59
  Certain Statistical Information With Respect to
     Bancshares.............................................      59
  Management................................................      59
     Directors of Bancshares................................      59
     Directors of Citizens..................................      60
     Executive Officers.....................................      60
  Security Ownership of Management..........................      61
  Market Price of Bancshares Common Shares..................      62
  Information Incorporated by Reference.....................      62
INFORMATION WITH RESPECT TO CENTURY.........................      62
  Business..................................................      62
  Management's Discussion and Analysis of Financial
     Condition and Results of Operations for the Year-Ended
     December 31, 1997......................................      63
  Description of Directors of Century who will serve as
     Directors of Bancshares after the Merger...............      63
  Information Incorporated by Reference.....................      63
  Security Ownership of Management and Certain Beneficial
     Owners.................................................      63
</TABLE>
 
                                       iv
<PAGE>   14
 
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
EXPERTS.....................................................      65
LEGAL OPINIONS..............................................      65
INDEMNIFICATION.............................................      65
PROPOSALS FOR 1998 ANNUAL MEETINGS..........................      65
APPENDICES:
  A. Agreement and Plan of Merger...........................     A-1
  B. Dissenters' Rights Under Section 1701.85 of the Ohio
     Revised Code...........................................     B-1
  C. Dissenters' Rights Under Subchapter D of Chapter 15 of
     the Pennsylvania Business Corporation Law of 1988, as
     amended................................................     C-1
  D. Fairness Opinion of Danielson Associates, Inc. dated as
     of November 17, 1997, and updated as of the date
     hereof.................................................     D-1
  E. Fairness Opinion of Sandler O'Neill & Partners, L.P.
     dated as of             , 1998.........................     E-1
  F. Audited Financial Statements for Year-Ended December
     31, 1997 for Century Financial Corporation.............     F-1
</TABLE>
 
                                        v
<PAGE>   15
 
                                    SUMMARY
 
     This summary is necessarily general and abbreviated and has been prepared
to assist the respective shareholders of Bancshares and Century in their review
of the Joint Proxy Statement/Prospectus. The summary is not intended to be a
complete explanation of the matters covered in the Joint Proxy
Statement/Prospectus and is qualified in all respects by reference to the more
detailed information contained in the Joint Proxy Statement/Prospectus and the
Appendices hereto, which the respective shareholders of Bancshares and Century
are urged to read carefully.
 
THE PARTIES
 
Citizens Bancshares,
Inc........................  Bancshares is a bank holding company organized and
                             existing under the laws of the State of Ohio and
                             registered with the Board of Governors of the
                             Federal Reserve System (the "Federal Reserve
                             Board") pursuant to the Bank Holding Company Act of
                             1956, as amended. Bancshares is a holding company
                             for The Citizens Banking Company, a wholly-owned
                             commercial bank subsidiary organized and existing
                             under the banking laws of the State of Ohio; First
                             National Bank of Chester, a wholly-owned commercial
                             bank subsidiary organized under the laws of the
                             United States; Freedom Express, Inc., a
                             wholly-owned courier company; and Freedom Financial
                             Life Insurance Company, a wholly-owned reinsurance
                             company. As of December 31, 1997, Bancshares had
                             total consolidated assets of approximately $1.117
                             billion and total shareholders' equity of
                             approximately $103.3 million.
 
                             A part of Bancshares' long term strategy is to be
                             an active acquiror of financial institutions so as
                             to leverage its operations and position itself to
                             enhance shareholder value. Since 1984, Bancshares
                             has made thirteen acquisitions totaling
                             $649,530,000 in assets. Since June of 1993,
                             Bancshares' Common Shares have been traded on the
                             Nasdaq National Market under the symbol "CICS".
                             Prior to June, 1993, Bancshares' stock was traded
                             over the counter. For the year ended December 31,
                             1997, Bancshares' return on assets and return on
                             equity was 1.64% and 17.73%, respectively.
 
                             On September 12, 1997 Bancshares signed an
                             agreement providing for UniBank of Steubenville,
                             Ohio, to be affiliated with Bancshares. UniBank has
                             approximately $216 million in assets, and operates
                             12 banking locations in Jefferson and Columbiana
                             Counties, which upon consummation of the
                             affiliation on March 6, 1998, became branches of
                             Citizens.
 
                             Bancshares' principal executive offices are located
                             at 10 East Main Street, Salineville, Ohio 43945.
                             The telephone number of Bancshares' executive
                             offices is (330) 679-2328.
 
Century Financial
Corporation................  Century is a bank holding company organized and
                             existing under the laws of the Commonwealth of
                             Pennsylvania and registered with the Federal
                             Reserve Board pursuant to the Bank Holding Company
                             Act of 1956, as amended. Century is a holding
                             company for Century National Bank and Trust
                             Company, a wholly-owned national banking
                             association organized under the laws of the United
                             States ("CNB"), whose deposits are insured by the
                             FDIC.
 
                             CNB engages in full service commercial and consumer
                             banking and trust services through thirteen (13)
                             branch offices in southwestern Pennsylvania. Twelve
                             (12) of the branch offices are located in Beaver
                             County, CNB's
 
                                       -1-
<PAGE>   16
 
                             primary market area, and one (1) of the branch
                             offices is located in adjacent Butler County.
                             During the five-year period beginning in 1993 and
                             ending in 1997, Century's combined total assets
                             have grown from approximately $318 million in 1993
                             to approximately $459 million in 1997. As of
                             December 31, 1997, Century had total consolidated
                             deposits of $392.9 million, consolidated total
                             assets of approximately $458.5 million and total
                             shareholders' equity of approximately $36.7
                             million, and had a total of 165 full-time and 46
                             part-time employees.
 
                             Since June 3, 1996, Century Common Shares have been
                             traded on the Nasdaq National Market System under
                             the symbol "CYFN." For the year ended December 31,
                             1997, Century's return on average assets and return
                             on average equity was 0.96% and 11.85%,
                             respectively.
 
                             Century's principal executive offices are located
                             at One Century Place, Rochester, Pennsylvania
                             15074. The telephone number of Century's executive
                             offices is (412) 774-1872.
 
CONTRIBUTION BY THE
PARTIES....................  The following table summarizes the percentage of
                             net interest income, net income, total assets and
                             shareholders' equity to be contributed by
                             Bancshares and Century, respectively, using
                             information as of and for the year ended December
                             31, 1997, and the voting percentage each group of
                             shareholders will have after the Merger, assuming
                             that each Century Common Share will be converted
                             into 0.425 Bancshares Common Shares in the Merger.
 
<TABLE>
<CAPTION>
                                                          BANCSHARES   CENTURY   TOTAL
                                                          ----------   -------   ------
<S>                                                       <C>          <C>       <C>
Net interest income.....................................    71.0%       29.0%    100.0%
Net income..............................................    79.9%       20.1%    100.0%
Total assets............................................    70.9%       29.1%    100.0%
Shareholders' equity....................................    73.8%       26.2%    100.0%
Voting percentage after Merger..........................    73.2%       26.8%    100.0%
</TABLE>
 
INFORMATION CONCERNING THE
BANCSHARES SPECIAL MEETING
 
General....................  The Bancshares Special Meeting will be held in the
                             Raymond J. Lowry Auditorium of the Fred H. Johnson
                             Building, 10 East Main Street, Salineville, Ohio,
                             on [April 14,] 1998 at   p.m., local time,
                             following adjournment of the Bancshares Annual
                             Meeting of Shareholders. The purpose of the
                             Bancshares Special Meeting is to consider and vote
                             upon the Merger Agreement and the transactions
                             contemplated thereby, as hereinafter described,
                             including the exchange of Bancshares Common Shares
                             for Century Common Shares and the merger of Century
                             with and into Bancshares on the terms described in
                             this Joint Proxy Statement/Prospectus. A copy of
                             the Merger Agreement is attached to this Joint
                             Proxy Statement/Prospectus as Appendix A and is
                             incorporated in this Joint Proxy
                             Statement/Prospectus by reference.
 
                             At the Bancshares Special Meeting the Bancshares
                             shareholders will also consider and vote upon a
                             proposal to amend the Articles of Incorporation of
                             Bancshares to increase the number of authorized
                             Bancshares Common Shares to 36,000,000 (the
                             "Articles Amendment") and a proposal to amend
                             Section Seven of the Code of Regulations of
                             Bancshares to increase the number of directors able
                             to serve on the Bancshares Board of Directors
 
                                       -2-
<PAGE>   17
 
                             to no fewer than nine (9) members and no more than
                             twenty-one (21) members and fix the size of the
                             Board of Directors at twenty-one (21) members (the
                             "Regulations Amendment"). See "INFORMATION
                             CONCERNING THE BANCSHARES SPECIAL
                             MEETING -- Matters to be Considered at the
                             Bancshares Special Meeting."
 
Solicitation and Voting of
  Proxies..................  All shareholders of record of Bancshares on March
                             2, 1998 (the "Record Date") will be entitled to
                             vote at the Bancshares Special Meeting. The
                             affirmative vote, in person or by proxy, of the
                             holders of not less than two-thirds of the issued
                             and outstanding Bancshares Common Shares is
                             required for approval of the Merger Agreement, the
                             affirmative vote of not less than a majority of the
                             issued and outstanding Bancshares Common Shares is
                             required for approval of the Articles Amendment and
                             the affirmative vote of not less than a majority of
                             the issued and outstanding Bancshares Common Shares
                             is required for approval of the Regulations
                             Amendment.
 
                             The directors and executive officers of Bancshares
                             and their affiliates owned, as of the Record Date,
                             434,432 Bancshares Common Shares, which represented
                             7.37% of the total number of outstanding Bancshares
                             Common Shares at such date.
 
INFORMATION CONCERNING
THE CENTURY SPECIAL
MEETING
 
General....................  The Century Special Meeting will be held at the
                             Beaver Valley Country Club, Patterson Heights,
                             Beaver Falls, Pennsylvania 15010, on [April 15,
                             1998] at 11:00 a.m., local time. The purpose of the
                             Century Special Meeting is to consider and vote
                             upon the Merger Agreement and the transactions
                             contemplated thereby, as hereinafter described,
                             including the conversion of Century Common Shares
                             into Bancshares Common Shares and the merger of
                             Century into Bancshares on the terms described in
                             this Joint Proxy Statement/Prospectus. A copy of
                             the Merger Agreement is attached to this Joint
                             Proxy Statement/Prospectus as Appendix A and is
                             incorporated in this Joint Proxy
                             Statement/Prospectus by reference.
 
Solicitation and Voting of
  Proxies..................  All shareholders of record of Century on March 2,
                             1998 (the "Record Date") will be entitled to vote
                             at the Century Special Meeting. The affirmative
                             vote, in person or by proxy, of the holders of not
                             less than a majority of the issued and outstanding
                             Century Common Shares is required for approval of
                             Merger Agreement.
 
                             The directors and executive officers of Century and
                             their affiliates owned, as of the Record Date,
                             905,941.3 Century Common Shares, which represented
                             17.78% of the total number of outstanding shares of
                             Century Common Shares at such date.
 
PROPOSED MERGER
 
The Merger Agreement.......  Bancshares and Century have entered into a Merger
                             Agreement, pursuant to which Century will merge
                             with and into Bancshares. Consummation of the
                             Merger, however, is subject to the approval by
                             Century and Bancshares shareholders of the Merger
                             Agreement and the transactions contemplated
                                       -3-
<PAGE>   18
 
                             thereby. The Merger is expected to qualify as a
                             "pooling of interests" for accounting and financial
                             reporting purposes. For a description of the Merger
                             Agreement, which is attached hereto as Appendix A
                             and incorporated by reference herein in its
                             entirety, see "PROPOSED MERGER."
 
                             Bancshares and Century have also entered into a
                             Stock Option Agreement dated as of November 17,
                             1997 that grants Bancshares a binding option to
                             purchase up to 19.9% of Century's Common Shares in
                             certain circumstances. For a description of the
                             Stock Option Agreement, see "PROPOSED
                             MERGER -- Stock Option Agreement."
 
Consideration for Century
  Common Shares............  Upon consummation of the Merger, each Century
                             Common Share outstanding (other than dissenting
                             shares) will be converted into 0.425 Bancshares
                             Common Shares, plus cash in lieu of fractional
                             shares, upon the terms and subject to certain
                             adjustments based on the then current closing price
                             of Bancshares Common Shares on the Nasdaq National
                             Market System (the "Conversion Ratio"). For a
                             complete description of the consideration to be
                             received by Century shareholders, see "PROPOSED
                             MERGER--Consideration for Century Common Shares."
 
Century Background and
Reasons for the Merger.....  Century's Board of Directors has unanimously
                             concluded that the Merger would be in the best
                             interests of Century shareholders and the
                             depositors, other customers and employees of its
                             subsidiary bank. The Board of Directors believes
                             that the Merger offers Century and its shareholders
                             an attractive opportunity to participate in a
                             company with enhanced financial strength that
                             should be able to compete more effectively in
                             western Pennsylvania than Century alone. The Board
                             of Directors also believes that this enhanced
                             financial strength will increase opportunities for
                             growth as a combined company, and will offer
                             greater flexibility in meeting the challenges
                             affecting the banking and financial services
                             industries.
 
Bancshares Background and
  Reasons for the Merger...  Bancshares' Board of Directors has concluded that
                             the Merger would be in the best interest of
                             Bancshares shareholders and the depositors, other
                             customers and employees of its subsidiary banks.
                             The Merger is consistent with Bancshares' overall
                             strategic acquisition program and, in particular,
                             its interest in expanding Citizens' facilities and
                             services in Beaver and Butler Counties,
                             Pennsylvania. Bancshares' philosophy of emphasizing
                             customer service and satisfaction, promoting local
                             and branch level decision-making power by employees
                             and making strong, ongoing commitments to each
                             community it and its subsidiary banks serve are
                             consistent with Century's management philosophies
                             and its long-standing reputation of service to
                             Beaver and Butler Counties, Pennsylvania. In
                             addition, the current products and services offered
                             by Century are similar to, and in many respects
                             complement, the products and services provided by
                             Bancshares and its subsidiary banks. Bancshares
                             anticipates that the additional products and
                             services that will become available to Century
                             customers as a result of the Merger will provide
                             opportunities for expanded and new customer
                             relationships. See "PROPOSED MERGER -- Bancshares'
                             Background and Reasons for the Merger."
 
Century Fairness Opinion...  Danielson Associates, Inc. ("Danielson Associates")
                             has rendered an original opinion to Century's Board
                             of Directors, dated November 17,
 
                                       -4-
<PAGE>   19
 
                             1997, and updated to the date hereof, that the
                             Merger is fair from a financial point of view to
                             the Century shareholders. For additional
                             information, see "PROPOSED MERGER -- Fairness
                             Opinion of Danielson Associates, Inc." The opinion
                             of Danielson Associates, Inc. is attached as
                             Appendix D to this Joint Proxy
                             Statement/Prospectus. Century shareholders are
                             urged to read such opinion in its entirety for a
                             description of the procedures followed and matters
                             considered in connection therewith.
 
Bancshares Fairness
Opinion....................  Sandler O'Neill & Partners, L.P. ("Sandler
                             O'Neill") has rendered an opinion to Bancshares'
                             Board of Directors, dated             , 1998, that
                             the Conversion Ratio is fair to Bancshares from a
                             financial point of view. For additional
                             information, see "PROPOSED MERGER -- Fairness
                             Opinion of Sandler O'Neill & Partners, L.P."
                             Bancshares shareholders are urged to read such
                             opinion in its entirety for a description of the
                             procedures followed, and assumptions made, matters
                             considered and qualifications and limitations on
                             the review undertaken in connection therewith.
 
Interest of Century
Management in the Merger...  Upon completion of the Merger, it is anticipated
                             that the directors and executive officers of
                             Bancshares will remain directors and executive
                             officers thereof. Three members of Century's Board
                             of Directors will be elected to serve on
                             Bancshares' Board of Directors, one of whom will be
                             designated for membership on the Executive
                             Committee of the Bancshares' Board of Directors.
                             Four members of Century's Board of Directors will
                             be elected by Bancshares (as the sole shareholder
                             of Citizens) to serve on the Board of Directors of
                             Citizens. Those four individuals will continue to
                             serve on the CNB Board of Directors until the CNB
                             Merger (as defined below). The remaining members of
                             the CNB Board of Directors will be given the
                             opportunity to serve on an advisory board to
                             Citizens to be known as the "Century Advisory
                             Board." Furthermore, three officers of CNB have
                             entered into employment agreements with CNB, which
                             Bancshares has agreed to assume on the Closing Date
                             of the Merger. Joseph N. Tosh, II will enter into
                             an employment agreement with Bancshares that will
                             go into effect at the effective time of the Merger.
                             See "PROPOSED MERGER--Interest of Century
                             Management in the Merger."
 
Recommendation of the Board
of Directors...............  The Boards of Directors of both Bancshares and
                             Century have unanimously approved the Merger
                             Agreement and believe that the Merger is fair to
                             and in the best interests of their respective
                             shareholders. The Century Board of Directors and
                             the Bancshares Board of Directors unanimously
                             recommend that their respective shareholders adopt
                             the Merger Agreement. See "PROPOSED
                             MERGER--Recommendation of the Century Board of
                             Directors" and "Recommendation of the Bancshares
                             Board of Directors."
 
Dissenters' Rights of
Bancshares Shareholders....  Holders of Bancshares Common Shares may exercise
                             their right to become dissenting shareholders to
                             the extent, and in strict compliance with the
                             procedure, specified in Section 1701.85 of the Ohio
                             Revised Code. HOLDERS OF BANCSHARES COMMON SHARES
                             WHO WANT TO EXERCISE THEIR DISSENTERS' RIGHTS MUST
                             NOT VOTE IN FAVOR OF THE MERGER AGREEMENT AT THE
                             SPECIAL MEETING AND MUST SEND WRITTEN DEMANDS FOR
                             PAYMENT FOR THEIR BANCSHARES COMMON SHARES WITHIN
                             TEN DAYS AFTER THE SPECIAL MEETING. See "PROPOSED
                             MERGER--Rights of
                                       -5-
<PAGE>   20
 
                             Dissenting Bancshares Shareholders" and the text of
                             Section 1701.85 of the Ohio Revised Code attached
                             to this Joint Proxy Statement/ Prospectus as
                             Appendix B.
 
Dissenters' Rights of
Century Shareholders.......  Holders of Century Common Shares may exercise their
                             right to become dissenting shareholders to the
                             extent, and in strict compliance with the
                             procedure, specified in Subchapter D of Chapter 15
                             of the Pennsylvania Business Corporation Law of
                             1988, as amended ("Subchapter D"). HOLDERS OF
                             CENTURY COMMON SHARES WHO WANT TO EXERCISE THEIR
                             DISSENTERS' RIGHTS MUST GIVE WRITTEN NOTICE TO
                             CENTURY PRIOR TO THE VOTE UPON THE MERGER AGREEMENT
                             OF THEIR INTENTION TO DEMAND PAYMENT IF THE MERGER
                             IS CONSUMMATED, MUST NOT CHANGE BENEFICIAL
                             OWNERSHIP OF THE SHARES, MUST NOT VOTE IN FAVOR OF
                             THE MERGER AGREEMENT AT THE SPECIAL MEETING AND, IF
                             THE MERGER IS APPROVED, MUST COMPLY WITH THE NOTICE
                             AND INSTRUCTIONS TO BE MAILED TO DISSENTERS BY
                             CENTURY REGARDING DEMAND FOR PAYMENT AND DEPOSIT OF
                             STOCK CERTIFICATES. See "PROPOSED MERGER--Rights of
                             Dissenting Century Shareholders" and the text of
                             Subchapter D attached to this Joint Proxy
                             Statement/Prospectus as Appendix C.
 
Federal Income Tax
Consequences of the
  Merger...................  It is intended that the Merger will be treated as a
                             reorganization within the meaning of Section 368(a)
                             of the Internal Revenue Code of 1986, as amended
                             (the "IRC"), and that, accordingly, for federal
                             income tax purposes no gain or loss will be
                             recognized by Century or Bancshares as a result of
                             the Merger. The obligation of Century to consummate
                             the Merger is conditioned upon the receipt by it of
                             an opinion of its counsel, reasonably satisfactory
                             in form and substance to it, to the effect that (i)
                             the Merger will constitute a tax-free
                             reorganization within the meaning of Section
                             368(a)(i)(A) of the IRC, (ii) no gain or loss will
                             be recognized by Century as a consequence of the
                             Merger, and (iii) no gain or loss will be
                             recognized by the shareholders of Century pursuant
                             to the terms of the Merger. Shareholders who
                             exercise dissenters' rights and receive cash for
                             their Century Common Shares will be treated as
                             having received a distribution in redemption of
                             their shares which will result in such shareholders
                             receiving income for federal income tax purposes.
 
                             All Century shareholders should read carefully the
                             description under "PROPOSED MERGER--Federal Income
                             Tax Consequences of the Merger," and should consult
                             their own tax advisors concerning these matters.
 
Conditions; Amendments;
  Termination..............  Completion of the Merger is conditioned upon
                             approval of the Merger Agreement by the respective
                             shareholders of Bancshares and Century and certain
                             regulatory authorities and upon certain other
                             conditions described in this Joint Proxy Statement/
                             Prospectus. The Merger Agreement may not be amended
                             except by a written agreement executed by the
                             parties.
 
                             The Merger Agreement may be terminated as follows:
                             (i) by mutual consent of the parties; (ii) by
                             Century if the Average NMS Closing Price (as that
                             term is defined in the Merger Agreement) is less
                             than $46.50;
 
                                       -6-
<PAGE>   21
 
                             (iii) by Century if (a) the Average NMS Closing
                             Price is less than $54.25 and (b) Bancshares'
                             Average NMS Closing Price is more than ten percent
                             (10%) lower than the average of the NMS Closing
                             Prices of an index of selected, publicly traded,
                             peer group, commercial banking institutions in
                             Ohio, Pennsylvania and West Virginia; (iv) by
                             either party if the transactions contemplated by
                             the Merger Agreement are not consummated by
                             September 30, 1998, or (v) in the event of a
                             material breach by the other party. See "PROPOSED
                             MERGER--Other Provisions of the Merger Agreement."
 
Management after the
Merger.....................  For a period of approximately six (6) months after
                             the Merger, CNB will be operated as a separate
                             banking subsidiary of Bancshares. It is intended
                             that Bancshares will merge CNB with and into
                             Citizens, with Citizens being the surviving bank
                             (the "CNB Merger"). The Merger Agreement provides
                             that Bancshares will offer existing employees of
                             Century and CNB the opportunity to continue as
                             employees of CNB until December 31, 1998. The
                             Merger Agreement further provides, however, that
                             Bancshares' commitment shall not be deemed a
                             contract of employment or construed to give such
                             employees rights other than as employees at will
                             under applicable law. See "PROPOSED
                             MERGER--Operations of Century After the Merger."
 
COMPARATIVE RIGHTS OF
  BANCSHARES AND CENTURY
  SHAREHOLDERS.............  The rights of shareholders of Bancshares and
                             shareholders of Century, while similar in many
                             respects, also differ in some respects. For a
                             description of the relative rights of the holders
                             of Bancshares Common Shares and Century Common
                             Shares under Ohio law and Pennsylvania law, as
                             applicable, as well as under the respective charter
                             documents, see "COMPARATIVE RIGHTS OF BANCSHARES
                             AND CENTURY SHAREHOLDERS." Bancshares' Articles of
                             Incorporation include a provision governing the
                             acquisition of certain controlling interests in
                             Bancshares. For a description of this provision,
                             see "DESCRIPTION OF BANCSHARES CAPITAL
                             SHARES--Description of Control Share Acquisition
                             Provisions."
 
                                       -7-
<PAGE>   22
 
                SUMMARY HISTORICAL FINANCIAL DATA OF BANCSHARES
 
     The following table presents summary historical financial data of
Bancshares and its consolidated subsidiaries for the period indicated. The
historical financial data as of and for the five years ended December 31, 1997
was derived from Bancshares' audited consolidated financial statements. The data
should be read in conjunction with the consolidated financial statements,
related notes and other financial information of Bancshares included or
incorporated by reference in this Joint Proxy Statement/Prospectus.
 
                           CITIZENS BANCSHARES, INC.
 
                    AS OF OR FOR THE YEAR ENDED DECEMBER 31
 
<TABLE>
<CAPTION>
                                      1997         1996         1995         1994         1993
                                   ----------   ----------   ----------   ----------   ----------
                                           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>          <C>          <C>          <C>          <C>
FOR THE YEAR:
Net interest income..............  $   42,625   $   42,533   $   39,640   $   38,228   $   35,207
Provision for loan losses........       1,646        1,614        2,024        2,365        3,573
Net income.......................      16,756       14,706       12,563       10,502        8,961
Cash dividends declared..........       6,605        4,876        2,972        1,708        1,014
PER SHARE DATA:(1)
Basic net income.................  $     2.85   $     2.50   $     2.13   $     1.78   $     1.52
Diluted net income...............        2.84         2.50         2.13         1.78         1.52
Cash dividends declared..........        1.12          .83          .50          .29          .17
Book value at year-end...........       17.51        15.21        13.58        11.19        10.53
BALANCE SHEET DATA (AT-YEAR-END):
Total assets.....................  $1,117,478   $  947,930   $  890,969   $  861,947   $  844,527
Loans, net of unearned income....     652,291      595,247      574,774      531,080      503,138
Allowance for loan losses........      12,188       11,350       10,895       10,393        9,728
Deposits.........................     795,178      709,592      697,664      671,999      689,385
Total shareholders' equity.......     103,277       89,712       80,111       66,013       62,129
SIGNIFICANT RATIOS:
Return on average assets.........       1.64%        1.64%        1.45%        1.24%        1.12%
Return on average shareholders'
  equity.........................       17.73        17.56        16.94        16.31        15.71
Average shareholders' equity to
  average assets.................        9.24         9.33         8.56         7.59         7.14
Allowance for loan losses as a
  percent of loans...............        1.87         1.91         1.90         1.96         1.93
Net interest margin, fully
  taxable equivalent.............        4.49         5.05         4.85         4.79         4.69
</TABLE>
 
- ---------------
 
(1) Per share data has been restated to reflect the three-for-two stock split
    declared in 1995, the two-for-one stock split declared in 1993 and all
    acquisitions accounted for as poolings of interests.
 
                                       -8-
<PAGE>   23
 
                  SUMMARY HISTORICAL FINANCIAL DATA OF CENTURY
 
     The following table presents summary historical financial data of Century
and its consolidated subsidiary for the period indicated. The historical
financial data as of and for the five years ended December 31, 1997 was derived
from Century's audited consolidated financial statements. The data should be
read in conjunction with the consolidated financial statements, related notes
and other financial information of Century included or incorporated by reference
in this Joint Proxy Statement/Prospectus.
 
                         CENTURY FINANCIAL CORPORATION
 
                    AS OF OR FOR THE YEAR ENDED DECEMBER 31
 
<TABLE>
<CAPTION>
                                      1997         1996         1995         1994         1993
                                   ----------   ----------   ----------   ----------   ----------
          FOR THE YEAR:                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>          <C>          <C>          <C>          <C>
Net interest income..............  $   17,396   $   16,698   $   15,060   $   13,848   $   13,037
Provision for loan losses........       2,070          625          240          270          625
Net income.......................       4,222        4,906        4,268        3,681        3,347
Cash dividends declared..........       2,182        1,952        1,892        1,318        1,487
PER SHARE DATA: (1)
Basic net income.................  $     0.83   $     0.97   $     0.84   $     0.73   $     0.66
Diluted net income...............        0.82         0.96         0.84         0.73         0.66
Cash dividends declared..........        0.43         0.39         0.37         0.27         0.25
Book value at year-end...........        7.21         6.75         6.27         5.48         5.15
BALANCE SHEET DATA (AT YEAR-END):
Total assets.....................  $  458,532   $  412,858   $  376,989   $  331,780   $  317,936
Loans, net of unearned income....     353,921      308,010      257,612      235,266      203,057
Allowance for loan losses........       4,717        3,234        3,003        3,206        3,070
Deposits.........................     392,926      363,394      328,325      298,039      285,395
Total shareholders'
  equity.........................      36,708       34,036       31,742       27,656       25,962
SIGNIFICANT RATIOS:
Return on average assets.........       0.96%        1.26%        1.18%        1.14%        1.09%
Return on average
  shareholders' equity...........       11.85        15.00        14.48        13.67        13.37
Average shareholders' equity to
  average assets.................        8.10         8.41         8.13         8.36         8.14
Allowance for loan losses as a
  percent of loans...............        1.33         1.05         1.17         1.36         1.51
Net interest margin, fully
  taxable equivalent.............        4.54         4.87         4.68         4.87         4.88
</TABLE>
 
- ---------------
(1) Per share amounts have been restated, giving effect for a six-for-five stock
    split declared April 21, 1993, a six-for-five stock split declared December
    15, 1994 and a three-for-two split declared April 28, 1997.
 
                                       -9-
<PAGE>   24
 
                                  RISK FACTORS
 
     In addition to the other information concerning Bancshares and its
subsidiary banks in this Joint Proxy Statement/Prospectus, the following risk
factors should be considered carefully.
 
IMPACT OF GOVERNMENT MONETARY POLICIES
 
     The earnings of banks and bank holding companies such as Bancshares are
affected by the policies of regulatory authorities, including the Federal
Reserve Board, which regulates the money supply. Among the methods employed by
the Federal Reserve Board are open market operations in U.S. Government
securities, changes in the discount rate on member bank borrowings, and changes
in reserve requirements against member bank deposits. These methods are used in
varying combinations to influence overall growth and distribution of bank loans,
investments and deposits, and their use may also affect interest rates charged
on loans or paid on deposits. The monetary policies of the Federal Reserve Board
have had a significant effect on the operating results of commercial and savings
banks in the past and are expected to continue to do so in the future.
 
ALLOWANCE FOR LOAN LOSSES
 
     Bancshares' allowance for loan losses is maintained at a level considered
adequate by management to absorb anticipated losses. The amount of future losses
is susceptible to changes in economic, operating and other conditions, including
changes in interest rates, that may be beyond Bancshares' control and such
losses may exceed current estimates. At December 31, 1997, Bancshares had total
nonperforming loans of approximately $2,530,000. At the same date, Bancshares'
allowance for loan losses was $12,188,000 or 1.87% of total loans and 481.74% of
total nonperforming loans. There can be no assurance, however, that such
allowance will be adequate to cover actual losses.
 
COMPETITIVE BANKING ENVIRONMENT
 
     Intense competition exists in all aspects of business in which Bancshares
is presently engaged, not only with other commercial banks and trust companies
but also with thrifts, finance companies, personal loan companies, credit
unions, leasing companies, money market mutual funds, investment firms, mortgage
bankers, and other financial institutions serving Bancshares' market area.
 
     Financial institutions compete on the basis of price, including interest
rates paid on deposits and charged on loans, convenience and quality of service.
This competition includes banks that are many times larger than Bancshares'
banking subsidiaries. Bancshares is encountering increased competition from
non-bank financial institutions. Thrift institutions, credit unions and small
loan companies each are significant factors in the traditional lending and
deposit gathering business of Bancshares. Insurance companies, investment firms
and retailers all are significant competitors for various types of business.
Many of Bancshares' competitors are larger and have greater resources than
Bancshares, and there are no assurances that Bancshares will be able to compete
effectively against such entities in the future.
 
GOVERNMENT REGULATION
 
     Bancshares and its banking subsidiaries are subject to extensive
governmental supervision, regulations and control. Future legislation and
government policy could adversely affect the banking industry and the operations
of Bancshares. There can be no assurance that the profitability of Bancshares
will not be adversely affected by changes in applicable laws, regulations and
policies.
 
ABILITY TO INTEGRATE OPERATIONS AND ACHIEVE COST SAVINGS AFTER THE MERGER
 
     The earnings and financial condition of Bancshares after the Merger will
depend in part on its ability to successfully integrate the operations and
management of Century and its wholly-owned subsidiary CNB, with and into
Bancshares. There can be no assurance that Bancshares will be able to
effectively and profitably integrate the operations and management of Century
and CNB. Further, although Bancshares anticipates cost savings as a result of
the Merger, there can be no assurance that it will be able to fully realize any
of the potential cost savings expected as a result of Bancshares and Century
being able to share administrative and other resources when their operations are
integrated. Finally, there can be no assurance that any cost savings which are
realized will not be offset by decreases in revenues or other charges to
earnings.
 
                                      -10-
<PAGE>   25
 
                       BANCSHARES SELECTED FINANCIAL DATA
 
                             YEAR ENDED DECEMBER 31
 
<TABLE>
<CAPTION>
                                                1997         1996         1995         1994         1993
                                             ----------   ----------   ----------   ----------   ----------
               FOR THE YEAR:                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                          <C>          <C>          <C>          <C>          <C>
Interest income                              $   81,917   $   74,556   $   70,824   $   64,648   $   61,846
Interest expense...........................      39,292       32,023       31,184       26,420       26,639
                                             ----------   ----------   ----------   ----------   ----------
Net interest income........................      42,625       42,533       39,640       38,228       35,207
Provision for loan losses..................       1,646        1,614        2,024        2,365        3,573
                                             ----------   ----------   ----------   ----------   ----------
Net interest income after provision for
  loan losses..............................      40,979       40,919       37,616       35,863       31,634
Other income...............................       6,992        4,826        4,493        3,687        4,780
Other expenses.............................      23,260       23,728       23,579       24,221       23,578
                                             ----------   ----------   ----------   ----------   ----------
Income before income taxes.................      24,711       22,017       18,530       15,329       12,836
Income taxes...............................       7,955        7,311        5,967        4,827        3,875
                                             ----------   ----------   ----------   ----------   ----------
Net income.................................  $   16,756   $   14,706   $   12,563   $   10,502   $    8,961
                                             ==========   ==========   ==========   ==========   ==========
Cash dividends declared....................  $    6,605   $    4,876   $    2,972   $    1,708   $    1,014
                                             ==========   ==========   ==========   ==========   ==========
PER SHARE DATA: (1)
Basic net income...........................  $     2.85   $     2.50   $     2.13   $     1.78   $     1.52
Diluted net income.........................        2.84         2.50         2.13         1.78         1.52
Cash dividends declared....................        1.12          .83          .50          .29          .17
Book value at year-end.....................       17.51        15.21        13.58        11.19        10.53
Weighted average shares outstanding basic
  (1)......................................   5,882,867    5,884,548    5,892,325    5,897,540    5,898,842
Shares outstanding at year-end (1).........   5,897,540    5,897,540    5,897,540    5,897,540    5,897,540
BALANCE SHEET DATA:
Total assets...............................  $1,117,478   $  947,930   $  890,969   $  861,947   $  844,527
Securities available for sale..............     331,729      240,375      206,988      109,115      142,045
Securities held to maturity................      57,398       65,230       53,706      173,291      152,158
Loans, net of unearned income..............     652,291      595,247      574,774      531,080      503,138
Allowance for loan losses..................      12,188       11,350       10,895       10,393        9,728
Deposits...................................     795,178      709,592      697,664      671,999      689,385
Federal Home Loan Bank advances............     136,765       49,923       84,680       85,762       57,198
Total shareholders' equity at year-end.....     103,277       89,712       80,111       66,013       62,129
AVERAGE BALANCES:
Total assets...............................  $1,022,653   $  897,331   $  866,627   $  848,055   $  798,395
Total earning assets.......................     968,138      859,488      831,063      812,179      760,661
Deposits...................................     727,782      706,801      682,013      681,916      682,074
Net loans..................................     608,464      569,222      532,051      500,343      477,760
Shareholders' equity.......................      94,500       83,757       74,154       64,393       57,033
SIGNIFICANT RATIOS:
Return on average assets...................       1.64%         1.64%        1.45%        1.24%        1.12%
Return on average shareholders' equity.....       17.73        17.56        16.94        16.31        15.71
Average shareholders' equity to average
  assets...................................        9.24         9.33         8.56         7.59         7.14
Average loans as a percent of average
  deposits.................................       85.24        82.15        79.66        74.89        71.38
Shareholders' equity as a percent of
  year-end assets..........................        9.24         9.46         8.99         7.66         7.36
Allowance for loan losses as a percent of
  loans....................................        1.87         1.91         1.90         1.96         1.93
Net charge-offs as a percent of average
  loans....................................         .13          .20          .28          .33          .36
Dividends declared as a percent of net
  income...................................       39.42        33.16        23.66        16.26        11.32
Net interest margin, fully taxable
  equivalent...............................        4.49         5.05         4.85         4.79         4.69
Nonperforming loans to total loans.........         .39          .31          .55          .97          .97
Nonperforming assets to total assets.......         .24          .22          .38          .82         1.01
Allowance for loan losses to nonperforming
  loans....................................      481.74       619.54       346.75       202.04       200.20
Noninterest expense as a percent of average
  assets...................................        2.27         2.64         2.72         2.86         2.95
Operating efficiency ratio.................       46.60        49.19        52.66        56.58        59.20
</TABLE>
 
- ---------------
 
(1) Per share data has been restated to reflect the three-for-two stock split
    declared in 1995, the two-for-one stock split declared in 1993 and all
    acquisitions accounted for as poolings of interests.
 
                                      -11-
<PAGE>   26
 
                        CENTURY SELECTED FINANCIAL DATA
 
                             YEAR ENDED DECEMBER 31
 
<TABLE>
<CAPTION>
                                                    1997        1996        1995        1994        1993
                                                  ---------   ---------   ---------   ---------   ---------
                                                        (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                               <C>         <C>         <C>         <C>         <C>
FOR THE YEAR:
Summary of Earnings Interest income.............  $  34,642   $  30,564   $  27,685   $  23,302   $  22,368
Interest expense................................     17,246      13,866      12,625       9,454       9,331
                                                  ---------   ---------   ---------   ---------   ---------
Net interest income.............................     17,396      16,698      15,060      13,848      13,037
Provision for loan losses.......................      2,070         625         240         270         625
                                                  ---------   ---------   ---------   ---------   ---------
Net interest income after provision for loan
  losses........................................     15,326      16,073      14,820      13,578      12,412
Other income....................................      3,158       2,716       2,574       2,739       2,293
Other expenses..................................     13,394      12,613      11,740      11,516      10,819
                                                  ---------   ---------   ---------   ---------   ---------
Income before income taxes......................      5,090       6,176       5,654       4,801       3,886
Income taxes....................................        868       1,270       1,386       1,120         539
                                                  ---------   ---------   ---------   ---------   ---------
Net Income......................................  $   4,222   $   4,906   $   4,268   $   3,681   $   3,347
                                                  =========   =========   =========   =========   =========
PER SHARE DATA: (1)
Basic earnings per share........................  $    0.83   $    0.97   $    0.84   $    0.73   $    0.66
Diluted earnings per share......................       0.82        0.96        0.84        0.73        0.66
Dividends declared..............................       0.43        0.39        0.37        0.27        0.25
Book value per share at period end..............       7.21        6.75        6.27        5.48        5.15
Average shares outstanding:
  Basic.........................................  5,065,901   5,054,070   5,059,983   5,046,659   5,043,425
  Diluted.......................................  5,139,955   5,090,899   5,070,242   5,056,096   5,047,889
BALANCE SHEET DATA:
(at end of period)
Assets..........................................  $ 458,532   $ 412,858   $ 376,989   $ 331,780   $ 317,936
Deposits........................................    392,926     363,394     328,325     298,039     285,395
Loans, net of unearned income...................    353,921     308,010     257,612     235,266     203,057
Allowance for loan losses.......................      4,717       3,234       3,003       3,206       3,070
Investment securities...........................         --          --          --      38,213      80,989
Investment securities available for sale........     67,647      71,873      99,052      38,672          --
Stockholders' equity............................     36,708      34,036      31,742      27,656      25,962
</TABLE>
 
- ---------------
 
(1) Per share amounts have been restated, giving effect for a six-for-five stock
    split declared April 21, 1993, a six-for-five stock split declared December
    15, 1994 and a three-for-two split declared April 28, 1997.
 
                                      -12-
<PAGE>   27
 
                    PRO FORMA SELECTED FINANCIAL INFORMATION
 
     The table below sets forth selected pro forma financial information for
Bancshares and Century combined as of and for the years ended December 31, 1997,
1996 and 1995. The pro forma data do not purport to be indicative of the results
of future operations or the actual results that would have occurred had the
Merger been consummated at the beginning of the periods presented. The pro forma
data give effect to the Merger and are based on numerous assumptions and
estimates. This information is derived from and should be read in conjunction
with the historical financial statements of Bancshares and Century that are
incorporated by reference into this Joint Proxy Statement/Prospectus, and with
the pro forma condensed consolidated financial statements of Bancshares, which
give effect to the Merger and which appear in this Joint Proxy
Statement/Prospectus under the caption "PRO FORMA FINANCIAL INFORMATION." The
pro forma condensed consolidated financial information has been prepared based
on the "pooling of interests" method of accounting assuming that 2,164,205
Bancshares Common Shares will be issued in the Merger and that no Century
shareholders will dissent from the Merger. The number of Bancshares Common
Shares issued assumes a conversion ratio of 0.425 Bancshares Common Shares for
each Century Common Share. This information will vary if any Century
shareholders dissent or if the Conversion Ratio is subject to adjustment as
provided in the Merger Agreement. See "PROPOSED MERGER -- Consideration for
Century Common Shares." The historical financial information of Bancshares and
Century has been combined for each period presented. For a discussion of the
pooling of interests method of accounting and the condition to Bancshares' and
Century's obligations under the Merger Agreement that the Merger qualify for the
pooling of interests method of accounting, see "PROPOSED MERGER -- Accounting
Treatment" and "Other Provisions of the Merger Agreement."
 
                           CITIZENS BANCSHARES, INC.
 
                    PRO FORMA SELECTED FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                             AS OF AND FOR THE YEAR ENDED DECEMBER 31,
                                                           ---------------------------------------------
                                                               1997            1996            1995
                                                           -------------   -------------   -------------
                                                           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                        <C>             <C>             <C>
OPERATING DATA:
Net interest income......................................   $   60,021      $   59,231      $   54,700
Provision for loan losses................................        3,716           2,239           2,264
Net income...............................................       20,978          19,612          16,831
Cash dividends declared..................................        8,787           6,828           4,864
PER SHARE DATA:
Net income -- basic......................................   $     2.61      $     2.44      $     2.09
Net income -- diluted....................................         2.59            2.43            2.09
Cash dividends...........................................         1.09            0.85            0.60
Book value at period end.................................        17.36           15.39           13.90
Weighted average shares outstanding -- basic.............    8,035,875       8,032,528       8,042,818
Weighted average shares outstanding -- diluted...........    8,093,800       8,067,251       8,058,253
BALANCE SHEET DATA (AT PERIOD END):
Total assets.............................................   $1,576,010      $1,360,788      $1,267,958
Net loans................................................      989,307         888,673         818,488
Total deposits...........................................    1,188,104       1,072,986       1,025,989
Total shareholders' equity...............................      139,985         123,748         111,853
</TABLE>
 
                                      -13-
<PAGE>   28
 
                           COMPARATIVE PER SHARE DATA
 
     The following table sets forth Bancshares' and Century's historical per
share data and pro forma combined per share data. The information is based on
the historical financial statements of Bancshares and Century. The pro forma
data do not purport to be indicative of the results of future operations or the
actual results that would have occurred had the Merger been consummated at the
beginning of the periods presented. The pro forma data give effect to the Merger
and are based on numerous assumptions and estimates. The pro forma data are
included as required by the rules of the Commission and are provided for
comparative purposes only. The pro forma combined per share data and Century
equivalent per share data are prepared assuming 2,164,205 Bancshares Common
Shares will be issued based on a conversion ratio such that one Century Common
Share will be exchanged for 0.425 Bancshares Common Shares. This information
will vary if any Century shareholders dissent or if the Conversion Ratio is
subject to adjustment as provided in the Merger Agreement. See "PROPOSED
MERGER -- Consideration for Century Common Shares."
 
                     CITIZENS BANCSHARES, INC. AND CENTURY
 
                           COMPARATIVE PER SHARE DATA
 
<TABLE>
<CAPTION>
                                                               AS OF AND FOR THE YEAR ENDED
                                                                       DECEMBER 31
                                                              ------------------------------
                                                                1997       1996       1995
                                                               ------     ------     ------
<S>                                                           <C>        <C>        <C>
NET INCOME PER COMMON SHARE:
HISTORICAL:
Bancshares
  Basic.....................................................   $ 2.85     $ 2.50     $ 2.13
  Diluted...................................................     2.84       2.50       2.13
Century
  Basic.....................................................     0.83       0.97       0.84
  Diluted...................................................     0.82       0.96       0.84
PRO FORMA COMBINED
  Basic.....................................................     2.61       2.44       2.09
  Diluted...................................................     2.59       2.43       2.09
EQUIVALENT AMOUNT OF CENTURY
  Basic.....................................................     1.11       1.04       0.89
  Diluted                                                        1.10       1.03       0.89
DIVIDENDS PER COMMON SHARE:
HISTORICAL:
  Bancshares................................................   $ 1.12     $ 0.83     $ 0.50
  Century...................................................     0.43       0.39       0.37
PRO FORMA EQUIVALENT AMOUNT OF CENTURY......................     0.48       0.35       0.21
BOOK VALUE PER COMMON SHARE:
HISTORICAL:
  Bancshares................................................   $17.51     $15.21     $13.58
  Century...................................................     7.21       6.75       6.27
PRO FORMA COMBINED..........................................    17.36      15.39      13.90
EQUIVALENT AMOUNT OF CENTURY................................     7.38       6.54       5.91
</TABLE>
 
                                      -14-
<PAGE>   29
 
                         COMPARATIVE MARKET VALUE DATA
 
     Bancshares Common Shares began trading on the Nasdaq National Market under
the symbol "CICS" as of June 1, 1993. The information presented in the following
table reflects the last reported sale price for Bancshares on December 2, 1997,
the last trading day preceding the public announcement of the Merger Proposal.
No assurance can be given as to what the market price of Bancshares Common
Shares will be if and when the Merger is consummated. Century Common Shares
began trading on the Nasdaq National Market under the symbol "CYFN" as of June
3, 1996. The information presented in the following table reflects the last
reported sale price for Century on December 2, 1997, the last trading day
preceding the public announcement of the Merger Proposal. No assurance can be
given as to what the market price of Century Common Shares will be if and at the
time the Merger is consummated.
 
                             BANCSHARES AND CENTURY
 
                            COMPARATIVE MARKET VALUE
 
<TABLE>
<CAPTION>
                                                               CENTURY
                                                              EQUIVALENT
                                                              PER SHARE
                                       BANCSHARES   CENTURY     BASIS
                                       ----------   -------   ----------
<S>                                    <C>          <C>       <C>
Common Shares........................    $62.50(1)  $24.50(2)  $26.5625(3)
</TABLE>
 
- ---------------
 
(1) Based on the last trade of Bancshares Common Shares on December 2, 1997 on
    the Nasdaq National Market.
 
(2) Based on the last trade of Century Common Shares on December 2, 1997 on the
    Nasdaq National Market.
 
(3) Based on a conversion ratio of 0.425 Bancshares Common Shares for each
    Century Common Share.
 
                                      -15-
<PAGE>   30
 
             INFORMATION CONCERNING THE BANCSHARES SPECIAL MEETING
 
GENERAL
 
     This Joint Proxy Statement/Prospectus is being furnished to holders of
Bancshares Common Shares as part of the solicitation of proxies by the
Bancshares Board of Directors for use at the Special Meeting to be held on
[April 14, 1998] at   p.m., following adjournment of the Bancshares Annual
Meeting of Shareholders, in the Raymond J. Lowry Auditorium of Fred H. Johnson
Building, 10 East Main Street, Salineville, Ohio, including any adjournments or
reschedulings thereof. This Joint Proxy Statement/Prospectus and the
accompanying Proxy Card are first being mailed to shareholders of Bancshares on
or about             , 1998.
 
     The purpose of the Bancshares Special Meeting is to consider and vote upon
the Merger Proposal to adopt the Merger Agreement and approve the transactions
contemplated thereby, and to approve the Articles Amendment and the Regulations
Amendment. No other business will be transacted at the Bancshares Special
Meeting other than possible adjournments or reschedulings thereof.
 
     The Merger is subject to a number of conditions, including the receipt of
required regulatory and shareholder approvals. See "PROPOSED MERGER--"Regulatory
Approvals" and "Other Provisions of the Merger Agreement."
 
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
 
     The Bancshares Board has fixed the close of business on March 2, 1998 (the
"Record Date") as the record date for the determination of the shareholders of
Bancshares entitled to notice of and to vote at the Bancshares Special Meeting.
Only holders of record of Bancshares Common Shares at the close of business on
the Record Date will be entitled to vote on each matter properly presented at
the Bancshares Special Meeting. On the Record Date, 5,897,540 Bancshares Common
Shares were issued and outstanding. Votes may be cast in person or by proxy, and
each Bancshares Common Share entitles its holder to one vote. Pursuant to the
Bancshares Code of Regulations, the presence of the holders of a majority of the
Bancshares Common Shares issued and outstanding, in person or by proxy, and
entitled to vote at the Bancshares Special Meeting is required for and shall
constitute a quorum for the transaction of business at the Bancshares Special
Meeting. For such purpose, abstentions and broker non-votes will be counted in
establishing the quorum. A majority of the Bancshares Common Shares present at
the Bancshares Special Meeting, in person or by proxy, whether or not
constituting a quorum, may vote to, or the Bancshares Board in its discretion
may, adjourn the Bancshares Special Meeting from time to time without further
notice, including for the purpose of soliciting additional proxies.
 
     Pursuant to the Bancshares Articles of Incorporation, the affirmative vote
of the holders of at least two-thirds of the total number of outstanding
Bancshares Common Shares entitled to vote at the Bancshares Special Meeting is
required to approve the Merger Proposal. The Bancshares Articles of
Incorporation require the affirmative vote of at least a majority of the total
number of outstanding Bancshares Common Shares entitled to vote at the
Bancshares Special Meeting to approve the Articles Amendment. Pursuant to the
Bancshares Code of Regulations, the affirmative vote of a majority of the total
number of outstanding Bancshares Common Shares entitled to vote at the
Bancshares Special Meeting is required to approve the Regulations Amendment. An
abstention and a broker non-vote in the case of the Merger Proposal, the
Articles Amendment or the Regulations Amendment would thus have the same effect
as a vote against the proposals.
 
     Only shareholders of record on the Record Date are eligible to give their
proxies. Therefore, shareholders owning shares held in the name of a brokerage
firm, bank, or other institution should sign, date and return their proxy cards
to such brokerage firm, bank or other institution in the envelope provided by
that firm. In addition, brokers who hold shares in street name for customers who
are the beneficial owners of such shares are prohibited from giving a proxy to
vote shares held for such customers on the approval of the Merger Proposal, the
Articles Amendment and the Regulations Amendment without specific instructions
from such customers. Since the affirmative vote of the holders of two-thirds of
the outstanding Bancshares Common Shares entitled to vote at the Bancshares
Special Meeting, in the case of the Merger Proposal, and the affirmative vote of
the holders of a majority of the outstanding Bancshares Common Shares entitled
to vote at the Bancshares Special Meeting, with respect to the Articles
Amendment and the Regulations Amendment, are required in order to approve the
 
                                      -16-
<PAGE>   31
 
proposals, the failure of such customers to provide specific instructions with
respect to their Bancshares Common Shares to their broker will have the effect
of a vote against the approval of the proposals. Failure to return a properly
executed proxy card or to vote at the Bancshares Special Meeting will have the
same effect as a vote against the Merger Proposal, the Articles Amendment and
the Regulations Amendment.
 
     Proxies in the accompanying form that are properly executed and returned to
Bancshares will be voted at the Bancshares Special Meeting in accordance with
the shareholders' instructions contained in such proxies and, at the discretion
of the Proxy Committee, on such other matters as may properly come before the
meeting. If a shareholder returns a proxy card that is signed, dated and not
marked, that shareholder will be deemed to have voted for the Merger Proposal,
the Articles Amendment and the Regulations Amendment. An executed proxy may be
revoked at any time prior to its exercise by submitting another proxy with a
later date, by appearing in person at the Bancshares Special Meeting and
advising the Secretary of the shareholder's intent to vote the shares or by
sending a written, signed and dated revocation that clearly identifies the proxy
being revoked to the principal executive offices of Bancshares at 10 East Main
Street, Salineville, Ohio 43945. A revocation may be in any written form validly
signed by the record holder as long as it clearly states that the proxy
previously given is no longer effective. In addition, shareholders whose
Bancshares Common Shares are not registered in their own name will need
additional documentation from the record holder of such shares to vote in person
at the Bancshares Special Meeting.
 
     Proxies may be solicited by mail, telephone, telegraph, telex, telecopier
and advertisement and in person. Solicitation may be made in the same manner by
directors, officers and other representatives of Bancshares who will not be
specially compensated for such activities, but who may be reimbursed for
reasonable out-of-pocket expenses in connection with such solicitation.
 
     Banks, brokerage houses and other custodians, nominees and fiduciaries will
be requested to forward the solicitation materials to the beneficial owners of
Bancshares Common Shares for which they hold of record, and Bancshares will
reimburse them for their reasonable out-of-pocket expenses.
 
     The expenses related to the proxy solicitation for the Bancshares Special
Meeting will be borne by Bancshares, except that the cost of preparing and
mailing this Joint Proxy Statement/Prospectus will be borne by Bancshares and
Century.
 
     The directors and executive officers of Bancshares and their affiliates
owned, as of the Record Date, 434,432 Bancshares Common Shares (7.37% of the
total number of outstanding shares of Bancshares Common Shares at such date).
 
MATTERS TO BE CONSIDERED AT THE BANCSHARES SPECIAL MEETING
 
     In addition to the Merger Proposal described more fully elsewhere in this
Joint Proxy Statement/Prospectus, see "PROPOSED MERGER", Bancshares shareholders
are being asked to consider (1) an amendment to the Bancshares' Articles of
Incorporation to increase the authorized number of Bancshares Common Shares to
36,000,000 and (2) an amendment to Section Seven of the Bancshares' Code of
Regulations to increase the number of directors of Bancshares at no fewer than
nine (9) members and no more than twenty-one (21) members and to fix the size of
the Board of Directors at twenty-one (21) members.
 
  Proposal to Amend the Bancshares Articles of Incorporation
 
     Article FOURTH of Bancshares' Fourth Amended Articles of Incorporation
currently provides that the total number of shares of all classes that
Bancshares is authorized to issue is 12,200,000 shares, consisting of 12,000,000
common shares and 200,000 serial preferred shares. Bancshares shareholders are
asked to act upon a proposal to approve an amendment to Article FOURTH to
increase the total number of authorized Bancshares Common Shares that Bancshares
is authorized to issue from 12,000,000 shares to 36,000,000 shares. No increase
is being proposed to the authorized number of 200,000 Serial Preferred Shares,
none of which are currently outstanding. The Bancshares' Board of Directors has
approved this amendment and directed that this proposal be submitted to
Bancshares shareholders for consideration.
 
                                      -17-
<PAGE>   32
 
     The following is the text of Article Fourth as proposed to be amended to
effect the increase in the total number of authorized shares and the number of
authorized Bancshares Common Shares:
 
     FOURTH: The total number of shares of all classes which the Corporation
     shall have authority to issue is thirty-six million two hundred thousand
     (36,200,000), divided into two classes as follows: 200,000 Serial
     Preferred, par value $10.00 (Ten Dollars) per share (hereinafter called the
     "Serial Shares"), and 36,000,000 Common Shares, without par value
     (hereinafter called the "Common Shares").
 
     If the amendment to Article FOURTH of Bancshares' Fourth Amended Articles
of Incorporation is approved by the Bancshares shareholders at the Bancshares
Special Meeting, the amendment to Article FOURTH would be effected by filing
with the Secretary of State of Ohio the Fifth Amended Articles of Incorporation
of Citizens Bancshares, Inc., on the soonest practicable date following the
Bancshares Special Meeting.
 
     The proposed increase in the authorized number of Bancshares Common Shares
is necessary to provide Bancshares with a sufficient number of Bancshares Common
Shares to effect the issuance of Bancshares Common Shares to Century
shareholders in the Merger, while leaving additional authorized but unissued
shares available for future corporate uses.
 
     Increasing the number of authorized shares to a number that provides for a
substantial number of additional authorized but unissued shares is a common
occurrence among publicly held companies. The authorized Bancshares Common
Shares in excess of those outstanding after the Merger will be available for
issuance at such times and for such purposes as the Board of Directors may deem
advisable without further action by Bancshares shareholders, except as may be
required by applicable laws or regulations, including Nasdaq rules.
 
     These purposes may include stock dividends, stock splits, employee benefit
programs, corporate business combinations, acquisitions, issuances of securities
convertible into Bancshares Common Shares or other corporate purposes. The Board
of Directors has no current plans to issue any Bancshares Common Shares for any
such purposes, other than pursuant to the Merger and shares needed to consummate
the Unibank affiliation, and does not intend to issue any Bancshares Common
Shares except on terms or for reasons that the Board of Directors deems to be in
the best interest of Bancshares and its shareholders.
 
     The additional Bancshares Common Shares would not, by itself, have any
effect on the rights of Bancshares shareholders. The issuance of the Bancshares
Common Shares for corporate purposes other than a stock split in pro rata
distribution to existing shareholders could have, among other things, a dilutive
effect on earnings per share and on the equity and voting power of shareholders
at the time of their issuance.
 
     The additional Bancshares Common Shares that would become available for
issuance if the proposed amendment is adopted could also be used by Bancshares
to delay, defer or prevent a change of control of Bancshares or other
transactions that might involve a premium price for holders of Bancshares Common
Shares or otherwise be in their best interest. For example, in the event of a
hostile attempt to take over control of Bancshares, Bancshares could issue
additional Bancshares Common Shares, thereby diluting the voting power of the
other outstanding shares and increasing the potential cost to acquire control of
Bancshares. The Board of Directors is not aware of any attempt to take control
of Bancshares and the Board of Directors has not presented this proposal with
the intent that it be utilized as an anti-takeover device. The proposed
amendment to Article FOURTH does not alter Bancshares' existing power to issue
up to 200,000 Serial Preferred Shares or alter Bancshares existing powers under
Article SIXTH of Bancshares Fourth Amended Articles of Incorporation to restrict
certain acquisitions of Bancshares Common Shares that meet the definition of a
Control Share Acquisition. See "DESCRIPTION OF BANCSHARES CAPITAL
SHARES -- Description of Control Share Acquisition Provisions." Each additional
Bancshares Common Share authorized as a result of the amendment to Article
FOURTH would have the same rights and privileges as each Bancshares Common Share
currently authorized or outstanding. See "DESCRIPTION OF BANCSHARES CAPITAL
SHARES -- General."
 
     The affirmative vote of the holders of a majority of the outstanding
Bancshares Common Shares entitled to vote at the Bancshares Special Meeting will
be necessary for the approval of the amendment to Article FOURTH of the Fourth
Amended Articles of Incorporation.
 
                                      -18-
<PAGE>   33
 
     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED AMENDMENT TO ARTICLE FOURTH OF BANCSHARES' FOURTH AMENDED ARTICLES OF
INCORPORATION TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES AND THE NUMBER
OF AUTHORIZED BANCSHARES COMMON SHARES.
 
  Proposal to Amend Section Seven of Bancshares Code of Regulations
 
     Section Seven of the Bancshares Code of Regulations fixes the number of
directors for the Bancshares Board of Directors at no fewer than nine (9)
members and no more than eleven (11) members. The Board of Directors further
recommends that the number of directors be increased to twenty-one (21) members.
 
     Pursuant to Section Nine of the Bancshares Code of Regulations, if the
number of directors is changed, any increase or decrease shall be apportioned
among the three classes so as to maintain the number of directors in each class
as nearly equal as possible. In this case, four additional vacancies will be
added to two classes and one additional vacancy will be added to one class.
 
     The Board of Directors is not currently nominating persons to fill the
proposed vacancies but recommends that the Board of Directors be expanded to
accommodate the appointment of Del E. Goedeker, Joseph N. Tosh, II, and Charles
I. Homan to the Bancshares Board of Directors upon consummation of the Merger as
contemplated by the Merger Agreement. See "INFORMATION WITH RESPECT TO
CENTURY--Management". Also, the Board of Directors believes that it is prudent
to have vacancies in the event that qualified candidates become available in
connection with one or more future acquisitions of Bancshares or for other
reasons. The Bancshares Code of Regulations provides that any vacancies
resulting from an increase in the number of directors, within the range
specified in Section Seven may be filled by the vote of a majority of directors
then in office.
 
     The affirmative vote of the holders of a majority of the outstanding
Bancshares Common Shares entitled to vote at the Bancshares Special Meeting will
be necessary for the approval of the amendment to Section Seven of the Code of
Regulations of Bancshares.
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO SECTION SEVEN OF BANCSHARES CODE OF REGULATIONS TO INCREASE THE
NUMBER OF DIRECTORS TO NO FEWER THAN NINE (9) MEMBERS AND NO MORE THAN
TWENTY-ONE (21) MEMBERS AND TO FIX THE SIZE OF THE BOARD OF DIRECTORS AT
TWENTY-ONE (21) MEMBERS.
 
               INFORMATION CONCERNING THE CENTURY SPECIAL MEETING
 
GENERAL
 
     This Joint Proxy Statement/Prospectus is being furnished to holders of
Century Common Shares as part of the solicitation of proxies by the Century
Board of Directors for use at the Century Special Meeting to be held on [April
15, 1998] at 11:00 a.m., at the Beaver Valley Country Club, Patterson Heights,
Beaver Falls, Pennsylvania 15010, including any adjournments or reschedulings
thereof. This Joint Proxy Statement/Prospectus and the accompanying Proxy Card
are first being mailed to shareholders of Century on or about             ,
1998.
 
     The purpose of the Century Special Meeting is to consider and vote upon the
Merger Proposal to adopt the Merger Agreement and approve the transactions
contemplated thereby. No other business will be transacted at the Century
Special Meeting other than possible adjournments or reschedulings thereof.
 
     The Merger is subject to a number of conditions, including the receipt of
required regulatory and shareholder approvals. See "PROPOSED MERGER--"Regulatory
Approvals" and "Other Provisions of the Merger Agreement."
 
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
 
     The Century Board has fixed the close of business on March 2, 1998 (the
"Record Date") as the record date for the determination of the shareholders of
Century entitled to notice of and to vote at the Century Special
 
                                      -19-
<PAGE>   34
 
Meeting. Only holders of record of Century Common Shares at the close of
business on the Record Date will be entitled to vote on each matter properly
presented at the Century Special Meeting. On the Record Date, 5,107,336 Century
Common Shares were outstanding. Votes may be cast in person or by proxy, and
each Century Common Share entitles its holder to one vote. Pursuant to the
Pennsylvania Business Corporation Law of 1988, as amended, and Century's ByLaws,
as amended, the presence of the holders of a majority of the Century Common
Shares issued and outstanding, in person or by proxy, and entitled to vote at
the Century Special Meeting is required for and shall constitute a quorum for
the transaction of business at the Century Special Meeting. Abstentions and
broker non-votes will be counted in establishing the quorum. A majority of the
Century Common Shares present at the Century Special Meeting, in person or by
proxy, whether or not constituting a quorum, may vote to, or the Century Board
in its discretion may, adjourn the Century Special Meeting from time to time
without further notice, including for the purpose of soliciting additional
proxies. Pursuant to Century's Articles of Incorporation, as amended, the
affirmative vote of the holders of at least a majority of the total number of
outstanding Century Common Shares is required to approve the Merger Proposal. An
abstention and a broker non-vote would thus have the same effect as a vote
against the Merger Proposal.
 
     Only shareholders of record on the Record Date are eligible to give their
proxies. Therefore, shareholders owning shares held in the name of a brokerage
firm, bank, or other institution should sign, date and return their proxy cards
to such brokerage firm, bank or other institution in the envelope provided by
that firm. In addition, brokers who hold shares in street name for customers who
are the beneficial owners of such shares are prohibited from giving a proxy to
vote shares held for such customers on the approval of the Merger Proposal
without specific instructions from such customers. Given that the affirmative
vote of the holders of a majority of the outstanding Century Common Shares is
required in order to approve the Merger Proposal, the failure of such customers
to provide specific instructions with respect to their Century Common Shares to
their broker will have the effect of a vote against the approval of the Merger
Proposal. Failure to return a properly executed proxy card or to vote at the
Century Special Meeting will have the same effect as a vote against the Merger
Proposal.
 
     Proxies in the accompanying form that are properly executed and returned to
Century will be voted at the Century Special Meeting in accordance with the
shareholders' instructions contained in such proxies and, at the discretion of
the Proxy Committee, on such other matters as may properly come before the
meeting. If a shareholder returns a proxy card that is signed, dated and not
marked, that shareholder will be deemed to have voted for the Merger Proposal.
An executed proxy may be revoked at any time prior to its exercise by submitting
another proxy with a later date, by appearing in person at the Century Special
Meeting and advising the Secretary of the shareholder's intent to vote the
shares or by sending a written, signed and dated revocation that clearly
identifies the proxy being revoked to the principal executive offices of Century
at One Century Place, Rochester, Pennsylvania 15074. A revocation may be in any
written form validly signed by the record holder as long as it clearly states
that the proxy previously given is no longer effective. In addition,
shareholders whose Century Common Shares are not registered in their own name
will need additional documentation from the record holder of such shares to vote
in person at the Century Special Meeting.
 
     Proxies may be solicited by mail, telephone, telegraph, telex, telecopier
and advertisement and in person. Solicitation may be made in the same manner by
directors, officers and other representatives of Century who will not be
specially compensated for such activities, but who may be reimbursed for
reasonable out-of-pocket expenses in connection with such solicitation.
 
     Banks, brokerage houses and other custodians, nominees and fiduciaries will
be requested to forward the solicitation materials to the beneficial owners of
Century Common Shares for which they hold of record, and Century will reimburse
them for their reasonable out-of-pocket expenses.
 
     The expenses related to the proxy solicitation for the Century Special
Meeting will be borne by Century, except that the cost of preparing and mailing
this Joint Proxy Statement/Prospectus will be borne by Century and Bancshares.
 
     The directors and executive officers of Century and their affiliates owned,
as of the Record Date, 905,941.3 Century Common Shares (17.78% of the total
number of outstanding shares of Century Common Shares at such date).
 
                                      -20-
<PAGE>   35
 
                                PROPOSED MERGER
 
     The following description of certain aspects of the Merger does not purport
to be complete and is qualified in its entirety by reference to the Merger
Agreement which is set forth in Appendix A, attached to and incorporated by
reference in this Joint Proxy Statement/Prospectus. All shareholders are urged
to read the Merger Agreement in its entirety.
 
CENTURY BACKGROUND AND REASONS FOR THE MERGER
 
     In the fall of 1997, Century's Board of Directors decided to explore the
strategic alternatives available to Century in light of the increasing
competitive pressures in the financial services industry and Century's limited
opportunities for internal growth given its capital profile and the markets in
which it conducts business. The Board of Directors retained Danielson Associates
as its financial advisors to assist it in this evaluation process. The
alternatives considered by the Board included possible acquisitions of other
financial institutions by Century as well as the acquisition of Century by
another financial institution.
 
     Based on its review of the strategic alternatives available to it, at a
meeting held on September 14, 1997, Century's Board of Directors decided to
pursue a sale of Century to another financial institution. The Board of
Directors retained Danielson Associates as its financial advisor in the sale
process. With Danielson Associates' assistance, the Board identified those
financial institutions which it believed would likely be most interested in
acquiring Century and which it believed would present the best opportunity for
the shareholders of Century to realize short-term and long-term value in an
acquisition. Danielson Associates provided limited public information to those
potential acquirors without disclosing the identity of Century and solicited
indications of interest from them. After obtaining a confidentiality agreement
from all parties that expressed an interest in an acquisition of Century,
Danielson Associates then provided them with an information memorandum which
described, among other things, the financial condition, results of operations,
business, operations, management and markets of Century in detail. Each
potential acquiror was asked to submit its best offer for the acquisition of
Century to Danielson Associates by November 7, 1997. At a meeting held on
November 11, 1997, Danielson Associates reviewed the offers that had been
received with Century's Board of Directors. After considering the offers, the
Board directed a small group of directors, together with Century's financial and
legal advisors, to travel to Salineville, Ohio to interview the senior
management of Bancshares to determine, among other things, whether Bancshares
had the managerial and operational depth to undertake the Merger and to manage
the combined company after the Merger. That interview was conducted on November
14, 1997. At that time, the representatives of Century negotiated certain
improvements in the financial terms of Bancshares' offer as well as certain
understandings regarding the impact of the Merger on Century's employees.
 
     At a meeting on November 14, 1997, the Board of Directors of Century
unanimously approved the execution by Century of a letter of intent with
Bancshares contemplating the Merger (the "Letter of Intent"). The Letter of
Intent, which was dated November 17, 1997, was generally not legally binding and
provided, among other things, that each party would proceed to conduct detailed
due diligence on the other and that the parties would negotiate and execute a
definitive agreement providing for the Merger. Simultaneously with the execution
of the Letter of Intent, the parties entered into the Stock Option Agreement. A
joint press release announcing the execution of the Letter of Intent and Stock
Option Agreement was issued on November 17, 1997. Century then proceeded to
conduct detailed due diligence on Bancshares. Century's Board of Directors
retained Ernst & Young, a nationally recognized accounting firm with experience
in evaluating financial institutions, to assist it in the due diligence process.
 
     At a meeting held on December 3, 1997, the Board of Directors of Century
unanimously approved the Merger Agreement and the Merger contemplated thereby.
The Board of Directors of Century believes that the terms of the Merger are fair
to and in the best interests of Century and its shareholders and recommends that
the shareholders of Century vote FOR approval of the Merger.
 
     In considering the transactions contemplated by the Merger Agreement, the
Century Board of Directors was assisted and advised by Danielson Associates. At
the meeting of the Board of Directors of Century held on December 3, 1997, at
which the proposed Merger was discussed and approved, Danielson Associates
presented valuation analyses and discussed its views with respect to the
Conversion Ratio. Danielson Associates then delivered its opinion to the Century
Board of Directors that the Conversion Ratio was fair, from a financial point
 
                                      -21-
<PAGE>   36
 
of view, to the holders of Century Common Shares. See "THE PROPOSED
MERGER-Opinion of Century's Financial Advisors."
 
     The terms of the Merger, the Merger Agreement, the Stock Option Agreement
and related agreements resulted from arm's-length negotiations between Century
and Bancshares and their respective representatives. In the course of reaching
its decision to approve the Merger, the Merger Agreement, the Stock Option
Agreement and related agreements, the Board of Directors of Century consulted
with Century's financial and legal advisors as well as with Century's
management, and considered a number of factors in addition to those discussed
above, including the following:
 
          (i) a review of the business, results of operation and financial
     condition of Century;
 
          (ii) economic conditions and prospects for Century in the markets in
     which it operates in light of intensifying competitive pressures in the
     financial services industry and increased regulatory supervision of the
     banking industry, including Century's prospects for future growth if
     Century were to remain independent;
 
          (iii) the opinion rendered by Danielson Associates to the effect that
     the Conversion Ratio was fair, from a financial point of view, to the
     holders of Century Common Shares, and the presentations made by Danielson
     Associates, including presentations as to selected financial and stock
     market data concerning Bancshares and Century, both on a historical and on
     a prospective basis, and information reflecting the two companies on a
     combined basis;
 
          (iv) comparisons to certain financial multiples (premium to market
     price, book value and earnings per shares) obtained by sellers in other
     recent acquisitions of financial institutions;
 
          (v) the fact that the Merger would provide holders of Century Common
     Shares with the opportunity to receive a premium over the recent market
     prices for their shares on a tax-free basis, while at the same time
     enabling them to participate in opportunities for growth in the combined
     company after the Merger;
 
          (vi) the belief that a business combination with Bancshares will offer
     long-term value to Century shareholders;
 
          (vii) the historical business, results of operations and financial
     condition of Bancshares and Bancshares' prospects for growth following the
     Merger;
 
          (viii) the effect of the Merger on Century's customers, employees and
     the communities in which it does business;
 
          (ix) the terms of the Merger Agreement and the Stock Option Agreement
     as presented to the Board of Directors of Century; and
 
          (x) a review of the regulatory and legal implications of the proposed
     Merger.
 
     Century's Board of Directors did not assign any specific or relative weight
to the foregoing factors in the consideration of the Merger.
 
     The Board of Directors of Century believes that the Merger offers Century
and its shareholders an attractive opportunity to participate in a company with
enhanced financial strength that should be able to compete more effectively in
the western Pennsylvania market than Century could alone. The combined company
will have significantly greater financial resources than Century alone,
particularly in terms of its equity capital. The Board of Directors of Century
believes this enhanced financial strength will increase opportunities for growth
as a combined company, and will offer greater flexibility in meeting the
challenges affecting the banking and financial services industries, such as
technological innovations, intensifying competitive pressures and industry
consolidations.
 
RECOMMENDATION OF THE CENTURY BOARD OF DIRECTORS
 
     IN VIEW OF ALL THE CONSIDERATIONS DESCRIBED ABOVE, THE BOARD OF DIRECTORS
OF CENTURY UNANIMOUSLY CONCLUDED THAT THE MERGER IS FAIR TO AND IN THE BEST
                                      -22-
<PAGE>   37
 
INTERESTS OF CENTURY AND THE CENTURY SHAREHOLDERS AND RECOMMENDS THAT CENTURY
SHAREHOLDERS VOTE FOR APPROVAL OF THE MERGER.
 
OPINION OF CENTURY'S FINANCIAL ADVISOR
 
     Century retained Danielson Associates to advise the Century Board of
Directors as to its "fair" sale value and the fairness to its shareholders of
the financial terms of the offer by Bancshares to acquire Century. Danielson
Associates is regularly engaged in the valuation of banks, bank holding
companies, and thrifts in the connection with mergers, acquisitions, and other
securities transactions; and has knowledge of, and experience with, the
Pennsylvania banking markets and banking organizations operating in those
markets. Danielson Associates was selected by Century because of its knowledge
of, expertise with, and reputation in the financial services industry.
 
     In such capacity, Danielson Associates reviewed the Merger Agreement with
respect to the pricing and other terms and conditions of the Merger, but the
decision as to accepting the offer was ultimately made by the Board of Directors
of Century. Danielson Associates rendered its oral opinion to the Century Board
of Directors, which it subsequently confirmed in writing, that as of the date of
such opinion, the financial terms of the Bancshares offer were "fair" to Century
and its shareholders. No limitations were imposed by the Century Board of
Directors upon Danielson Associates with respect to the investigation made or
procedures followed by it in arriving at its opinion.
 
     In reaching its opinion, Danielson Associates (a) reviewed certain business
and financial information relating to Century and Bancshares, including annual
reports for the fiscal year ended December 31, 1996 and call report data from
1989 to 1996, including quarterly reports for 1997; (b) discussed the past and
current operations, financial condition and prospects of Century with its senior
executives; (c) analyzed the pro forma impact of the merger on Bancshares'
earnings per share, capitalization, and financial ratios; (d) reviewed the
reported prices and trading activity for Century Common Shares and Bancshares
Common Shares and compared them to similar bank holding companies; (e) reviewed
and compared the financial terms, to the extent publicly available, with
comparable transactions; (f) reviewed the Merger Agreement and certain related
documents; and (g) considered such other factors as were deemed appropriate.
 
     Danielson Associates did not obtain any independent appraisal of assets or
liabilities of Century or Bancshares or their respective subsidiaries. Further,
Danielson Associates did not independently verify the information provided by
Century or Bancshares and assumed the accuracy and completeness of all such
information.
 
     In arriving at its opinion, Danielson Associates performed a variety of
financial analyses. Danielson Associates believes that its analyses must be
considered as a whole and that consideration of portions of such analyses and
the factors considered therein, without considering all the factors and
analyses, could create an incomplete view of the analyses and the process
underlying the Danielson Associates opinion. The preparation of a fairness
opinion is a complex process involving subjective judgments and is not
necessarily susceptible to partial analysis and summary description.
 
     In its analyses, Danielson Associates made certain assumptions with respect
to industry performance, business and economic conditions, and other matters,
many of which were beyond Century's or Bancshares' control. Any estimates
contained in Danielson Associates analyses are not necessarily indicative of the
future results of value, which may be significantly more or less favorable than
such estimates. Estimates of the value of companies do not purport to be
appraisals or necessarily reflect the prices at which companies or their
securities may actually be sold.
 
     The following is a summary of selected analyses considered by Danielson
Associates in connection with its opinion letter.
 
  Pro Forma Merger Analyses
 
     Danielson Associates analyzed the changes in the amount of earnings and
book value represented by the receipt of $137.8 million for all of the
outstanding shares of Century Common Shares, which will be paid in
 
                                      -23-
<PAGE>   38
 
Bancshares Common Shares. The analysis evaluated, among other things, possible
dilution in earnings and capital per share for Bancshares Common Shares.
 
  Comparable Companies
 
     Danielson Associates compared Century's (a) tangible capital of 8.30% of
assets as of September 30, 1997, (b) .65% of assets nonperforming as of
September 30, 1997, and (c) net operating income of 1.76% of average assets for
the trailing twelve month period ending September 30, 1997, with the medians for
selected Pennsylvania banks that Danielson Associates deemed comparable. These
banks included Citizens National Bank of Evans City, First Western Bank, Mars
National Bank and Reeves Bank. Their medians were (a) tangible capital of 5.23%
of assets, (b) .56% of assets nonperforming, and (c) net operating income of
1.86% of average assets.
 
     Danielson Associates also compared Bancshares' (a) stock price as of
November 17, 1997 equal to 21.9 times earnings and 365% of book value, (b)
dividend yield based on trailing four quarters as of September 30, 1997 and
stock price as of November 17, 1997 of 1.75%, (c) tangible capital as of
September 30, 1997 of 9.38% of assets, (d) nonperforming assets as of September
30, 1997 equal to .23% of total assets, (e) return on average assets during the
trailing four quarters ended September 30, 1997 of 1.72% and (f) return on
average equity during the same period of 18.39%, with the medians for selected
banks and bank holding companies that Danielson Associates deemed to be
comparable to Bancshares. The selected institutions included BancFirst Ohio
Corp., City Holding Company, First Financial Bancorp, Horizon Bancorp, Inc.,
Matewan Bancshares, Inc., Mid Am, Inc., Park National Corporation, Second
Bancorp, Incorporated, United Bankshares, Inc. and WesBanco, Inc. The comparable
medians were (a) stock price equal to 19.2 times earnings and 243% of book, (b)
dividend yield of 2.45%, (c) tangible capital of 9.21% of assets, (d) .33% of
assets nonperforming, (e) return on average assets of 1.37% and (f) return on
average equity of 13.78%. Danielson Associates also compared other income,
expense, and balance sheet information of such companies with similar
information about Bancshares.
 
  Comparable Transaction Analysis
 
     Danielson Associates compared the consideration to be paid in the merger to
the latest twelve months earnings and equity capital of Century with earnings
and capital multiples paid in acquisitions of MidAtlantic banks in 1996 and 1997
through the opinion date. Of these, the most applicable recent transactions
included Fulton Financial's acquisition of Keystone Heritage Group, Inc.;
FirstMerit Corporation purchasing CoBancorp, Inc.; WesBanco buying Commercial
Bancshares, Inc.; and, earlier in 1997, Area Bancshares Corporation's purchase
of Cardinal Bancshares, Inc. At the time Danielson Associates made its analysis,
the consideration to be paid in the merger was 363% of Century's September 30,
1997 book value and 24.5 times Century's earnings for the trailing four quarters
as of September 30, 1997. This compares to the median multiples of 284% of book
value and 21.1 times earnings for the comparable acquisitions.
 
     The transaction price also was compared to the prices paid for eight sales
involving banks from Kentucky, Maryland, Ohio, Pennsylvania and West Virginia
with assets over $100 million during 1997. The median comparable deal prices in
these transactions were 271% of book value and 22.0 times earnings.
 
  Other Analysis
 
     In addition to performing the analyses summarized above, Danielson
Associates also considered the general market for bank and thrift mergers, the
historical financial performance of Century and Bancshares, the deposit market
shares of both banks, and the general economic conditions and prospects of those
banks.
 
     No company or transaction used in this composite analysis is identical to
Century or Bancshares. Accordingly, an analyses of the results of the foregoing
is not mathematical; rather it involves complex consideration and judgments
concerning differences in financial and operating characteristics of the
companies and other factors that could affect the public trading values of the
company or companies to which they are being compared.
 
                                      -24-
<PAGE>   39
 
     The summary set forth above does not purport to be a complete description
of the analyses and procedures performed by Danielson Associates in the course
of arriving at its opinions. In payment for its services as the financial
advisor to Century, Danielson Associates is to be paid an estimated fee of about
$694,000.
 
The full text of the opinion of Danielson Associates dated as of November 17,
1997, which sets forth assumptions made and matters considered, is attached
hereto as Exhibit D of this Joint Proxy Statement/Prospectus. Century
shareholders are urged to read this opinion in its entirety. Danielson
Associates' opinion is directed only to the consideration to be received by
Century shareholders in the Merger and does not constitute a recommendation to
any Century shareholder as to how such shareholder should vote at the Century
Shareholders Meeting.
 
BANCSHARES BACKGROUND AND REASONS FOR THE MERGER
 
     In the fall of 1997, Bancshares was contacted by Danielson Associates
regarding the potential interest of Century's Board of Directors in pursuing a
sale of Century to facilitate a strategic affiliation with a financial
institution similar to Bancshares.
 
     The Bancshares Board of Directors decided to evaluate a possible
affiliation between Bancshares and Century. After communicating its interest to
Danielson Associates and having preliminary discussions with the Century Board
of Directors, Bancshares retained Sandler O'Neill to assist it in connection
with its consideration of a possible business combination with Century. For
further discussion of Sandler O'Neill's analysis, see "PROPOSED
MERGER -- Opinion of Bancshares' Financial Advisor." In order to commence its
investigation of Century, on November 17, 1997, Bancshares entered into a letter
of intent with Century contemplating the Merger. On the same date, Bancshares
and Century entered into a Stock Option Agreement. See "PROPOSED MERGER -- Stock
Option Agreement."
 
     Bancshares' Board of Directors has concluded that the Merger would be in
the best interests of Bancshares' shareholders and the depositors, other
customers and employees of its subsidiary banks. The Merger is consistent with
Bancshares' overall strategic acquisition program and, in particular, its
interest in expanding Citizens' facilities and services in Beaver and Butler
Counties, Pennsylvania. Bancshares' philosophies of emphasizing customer service
and satisfaction, promoting local and branch level decision-making power by
employees and making strong, ongoing commitments to each community it and its
banking subsidiaries serve are consistent with Century's management philosophies
and its long-standing reputation of service to Beaver and Butler Counties,
Pennsylvania. In addition, the current products and services offered by Century
are similar to, and in many respects, complement the products and services
provided by Bancshares and its banking subsidiaries. Bancshares anticipates that
the additional products and services that will become available to Century
customers as a result of the Merger will provide opportunities for expanded and
new customer relationships. On November 19, 1997, the Bancshares' Board of
Directors unanimously approved the Merger Agreement and the transactions
contemplated thereby.
 
RECOMMENDATION OF THE BANCSHARES BOARD OF DIRECTORS
 
     IN VIEW OF ALL THE CONSIDERATIONS DESCRIBED ABOVE, THE BOARD OF DIRECTORS
OF BANCSHARES UNANIMOUSLY CONCLUDED THAT THE MERGER IS IN THE BEST INTERESTS OF
AND IS FAIR TO THE BANCSHARES SHAREHOLDERS AND RECOMMENDS THAT BANCSHARES
SHAREHOLDERS VOTE FOR THE MERGER.
 
OPINION OF BANCSHARES' FINANCIAL ADVISOR
 
     Pursuant to a letter agreement dated as of November 14, 1997 (the "Sandler
O'Neill Agreement"), Bancshares retained Sandler O'Neill as an independent
financial advisor in connection with Bancshares' consideration of a possible
business combination with Century. Sandler O'Neill is a nationally recognized
investment banking firm whose principal business specialty is banks and savings
institutions. In the ordinary course of its investment banking business, Sandler
O'Neill is regularly engaged in the valuation of such businesses and their
securities in connection with mergers and acquisitions and other corporate
transactions.
 
                                      -25-
<PAGE>   40
 
     In connection with its consideration of the Merger, the Board of Directors
of Bancshares requested Sandler O'Neill to render its opinion as to the fairness
of the Conversion Ratio to Bancshares from a financial point of view. On
December 3, 1997, Sandler O'Neill delivered to the Bancshares Board of Directors
its opinion that, as of such date, the Conversion Ratio was fair to Bancshares
from a financial point of view. Sandler O'Neill has also delivered to
Bancshares' Board of Directors a written opinion dated the date of this Joint
Proxy Statement/Prospectus (the "Sandler O'Neill Fairness Opinion"), which is
substantially identical to the December 3, 1997 opinion. THE FULL TEXT OF THE
SANDLER O'NEILL FAIRNESS OPINION, WHICH SETS FORTH THE PROCEDURES FOLLOWED,
ASSUMPTIONS MADE, MATTERS CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON THE
REVIEW UNDERTAKEN IN CONNECTION WITH RENDERING SUCH OPINION, IS ATTACHED AS
APPENDIX E TO THIS JOINT PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN
BY REFERENCE. THE DESCRIPTION OF THE OPINION SET FORTH HEREIN IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO APPENDIX E. BANCSHARES' SHAREHOLDERS ARE URGED TO
READ THE SANDLER O'NEILL FAIRNESS OPINION IN ITS ENTIRETY IN CONNECTION WITH
THEIR CONSIDERATION OF THE PROPOSED MERGER.
 
     THE SANDLER O'NEILL FAIRNESS OPINION WAS PROVIDED TO THE BANCSHARES BOARD
OF DIRECTORS FOR ITS INFORMATION AND IS DIRECTED ONLY TO THE FAIRNESS, FROM A
FINANCIAL POINT OF VIEW, OF THE CONVERSION RATIO TO BANCSHARES. IT DOES NOT
ADDRESS THE UNDERLYING BUSINESS DECISION OF BANCSHARES TO ENGAGE IN THE MERGER
OR ANY OTHER ASPECT OF THE MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO
ANY HOLDER OF SHARES OF BANCSHARES COMMON SHARES AS TO HOW SUCH SHAREHOLDER
SHOULD VOTE AT THE BANCSHARES SPECIAL MEETING WITH RESPECT TO THE MERGER OR ANY
OTHER MATTER RELATED THERETO.
 
     In connection with rendering its December 3, 1997 opinion, Sandler O'Neill
performed a variety of financial analyses. The following is a summary of such
analyses, but does not purport to be a complete description of all the analyses
underlying Sandler O'Neill's opinion. The preparation of a fairness opinion is a
complex process involving subjective judgments and is not necessarily
susceptible to partial analyses or summary description. Sandler O'Neill believes
that its analyses must be considered as a whole and that selecting portions of
such analyses and the factors considered therein, without considering all
factors and analyses, could create an incomplete view of the analyses and
processes underlying its opinion. In performing its analyses, Sandler O'Neill
made numerous assumptions with respect to industry performance, business and
economic conditions and various other matters, many of which cannot be predicted
and are beyond the control of Bancshares, Century and Sandler O'Neill. Any
estimates contained in Sandler O'Neill's analyses are not necessarily indicative
of future results or values, which may be significantly more or less favorable
than such estimates. Estimates on the values of companies do not purport to be
appraisals or necessarily reflect the prices at which companies or their
securities may actually be sold. Because such estimates are inherently subject
to uncertainty, none of Bancshares, Century or Sandler O'Neill assumes
responsibility for their accuracy.
 
  Summary of Proposal
 
     Sandler reviewed the financial terms of the proposed transaction. Based on
the closing price of Bancshares Common Shares on December 2, 1997 of $62.50 and
a Conversion Ratio of 0.425, Sandler calculated an implied transaction value per
share of Century of $26.56. Based upon Century's September 30, 1997 financial
information and a Conversion Ratio of 0.425, Sandler calculated the price to
tangible book value, price to last twelve months' normalized earnings and core
deposit premium. This analysis yielded a price to tangible book value multiple
of 369%, a price to last twelve months' normalized earnings multiple of 24.8x
and a core deposit premium of 35.5%.
 
  Stock Trading History
 
     Sandler O'Neill reviewed the history of the reported trading prices and
volume of Bancshares Common Shares and Century Common Shares, and the
relationship between the movements in the prices of Bancshares Common Shares and
Century Common Shares, respectively, to movements in certain stock indices,
including Standard & Poor's 500 Index, the Nasdaq Banking Index and a selected
composite group of publicly traded commercial banks and bank holding companies
(identified below). During the one-year period ended December 2, 1997, each of
the Bancshares Common Shares and the Century Common Stock outperformed each of
the indices to which it was compared.
                                      -26-
<PAGE>   41
 
  Comparable Company Analyses
 
     Sandler O'Neill used publicly available information to compare selected
financial and market trading information, including balance sheet composition,
asset quality ratios, loan loss reserve levels, profitability, capital adequacy,
dividends and trading multiples, for Century, Bancshares and two groups of
selected institutions. The first group consisted of Century and Bancshares and
the following twenty-one publicly traded regional commercial banks (the
"Regional Group"): S&T Bancorp Inc., WesBanco Inc., First Western Bancorp Inc.,
BT Financial Corp., National Penn Bancshares Inc., FirstFederal Financial
Services, City Holding Co., JeffBanks Inc., BancFirst Ohio Corp., Harleysville
National Corp., Omega Financial Corp., Horizon Bancorp Inc., Prime Bancorp Inc.,
Second Bancorp Inc., Patriot Bank Corp., Southwest National Corp., Peoples
Bancorp Inc., Matewan BancShares Inc., Sun Bancorp Inc., American Bancorp. and
Citizens Banks Inc. Sandler O'Neill also compared Century and Bancshares to a
group of seventeen publicly traded commercial banks that had a return on equity
of greater than 17.0% (based on last twelve months' earnings) and a
price-to-tangible book value of greater than 240% (the "Highly-Valued Group").
The Highly-Valued Group was comprised of Bancshares, Westernbank Puerto Rico,
GBC Bancorp, Santa Barbara Bancorp, Irwin Financial Corp., Mississippi Valley
Bancshares, Sterling Bancshares Inc., Cape Cod Bank and Trust Co., U.S.B.
Holding Co., Lakeland Financial Corp., Premier Bancshares Inc., Broad National
Bancorp., Interchange Financial Services, Franklin Bancorp., Bank of Commerce,
Centennial Bancorp and S.Y. Bancorp Inc. The analyses compared publicly
available information for Bancshares and Century and the median data for each of
the Regional Group and the Highly-Valued Group as of and for each of the years
ended December 31, 1992 through December 31, 1996 and as of and for the twelve
months ended September 30, 1997.
 
  Analyses of Selected Merger Transactions
 
     Sandler O'Neill reviewed the 138 transactions announced from January 1,
1997 to December 2, 1997 (the "Analysis Period") involving publicly traded
commercial banks as acquired institutions with transaction values over $15
million ("Nationwide Transactions") and 14 transactions announced during the
Analysis Period involving publicly traded commercial banks in Pennsylvania, Ohio
and West Virginia as acquired institutions with transaction values over $15
million ("Regional Transactions"). Sandler O'Neill reviewed the ratios of
transaction value to last twelve months' net income, transaction value to
tangible book value, transaction value to book value, tangible book premium to
core deposits, transaction value to total deposits and transaction value to
total assets and computed high, low, mean and median ratios and premiums for the
respective groups of transactions. These multiples were applied to Century's
financial information as of and for the twelve months ended September 30, 1997.
Based upon the median multiples for Nationwide Transactions, Sandler O'Neill
derived an imputed range of values per share of Century Common Shares of $17.28
to $21.07. Based upon the median multiples for Regional Transactions, Sandler
O'Neill derived an imputed range of values per share of Century Common Shares of
$20.87 to $25.06.
 
     No company involved in the transactions included in the above analysis is
identical to Bancshares or Century and no transaction included in the above
analysis is identical to the Merger. Accordingly, an analysis of the results of
the foregoing analysis is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value of Bancshares and Century and the companies to which they are
being compared.
 
  Discounted Dividend Stream and Terminal Value Analysis
 
     Sandler O'Neill also performed an analysis which estimated the future
stream of after-tax dividend flows of Century through the year 2002 under
various circumstances, assuming Century performed in accordance with the
earnings forecasts of its management and certain variations thereof. To
approximate the terminal value of Century Common Shares at December 31, 2002,
Sandler O'Neill applied price to earnings multiples ranging from 10x to 28x and
applied multiples of tangible book value ranging from 160% to 340%. The dividend
income streams and terminal values were then discounted to present values using
different discount rates (ranging from 10% to 15%) chosen to reflect different
assumptions regarding required rates of return of holders or prospective buyers
of Century Common Shares. This analysis, assuming the current dividend payout
ratio and management's earnings forecasts, indicated an imputed range of values
per share of Century Common Shares of between $9.69 and
                                      -27-
<PAGE>   42
 
$29.59 when applying the price to earnings multiples, and an imputed range of
values per share of Century Common Shares of between $10.78 and $25.84 when
applying multiples of tangible book value. In connection with its analysis,
Sandler O'Neill used sensitivity analyses to consider the effects changes in the
underlying assumptions (including variations with respect to the growth rate of
assets, net interest spread, non-interest income, non-interest expenses and
dividend payout ratio) would have on the resulting present value.
 
  Pro Forma Merger Analysis
 
     Sandler O'Neill analyzed certain potential pro forma effects of the Merger
on Bancshares, based upon a Conversion Ratio of 0.425, Bancshares' and Century's
current and projected income statements and balance sheets, and assumptions
regarding the economic environment, accounting and tax treatment of the Merger,
charges associated with the Merger, operating efficiencies and other adjustments
discussed with the senior managements of Bancshares and Century. This analysis
indicated that the Merger would be accretive to Bancshares' earnings per share
in all periods analyzed, and accretive to tangible book value per share of
Bancshares' Common Shares for all periods analyzed. The actual results achieved
by Citizens may vary from projected results and the variations may be material.
 
  Contribution Analysis
 
     Sandler reviewed the relative contributions to, among other things, total
assets, total net loans, total deposits, total equity, total tangible equity,
and last twelve months' ("LTM") net income to be made by Bancshares and Century
to the combined institution based on data at and for the twelve months ended
September 30, 1997. This analysis indicated that Century's implied contribution
was 25.6% of total assets, 31.5% of total net loans, 28.4% of total deposits,
23.7% of total equity, 25.1% of total equity, 22.0% of LTM net income. Based
upon a Conversion Ratio of 0.425, holders of the Century Common Shares would own
approximately 24.0% of the outstanding shares of the combined institution.
 
     In connection with rendering its December 3, 1997 opinion, Sandler O'Neill
reviewed, among other things: (i) the Merger Agreement and exhibits thereto;
(ii) the Stock Option Agreement; (iii) Bancshares' audited consolidated
financial statements and management's discussion and analysis of financial
condition and results of operations contained in its annual report to
shareholders for the year ended December 31, 1996; (iv) Century's audited
consolidated financial statements and management's discussion and analysis of
financial condition and results of operations contained in its annual report to
shareholders for the year ended December 31, 1996; (v) Citizens' unaudited
consolidated financial statements and management's discussion and analysis of
financial condition and results of operations contained in its Quarterly Report
on Form 10-Q for the quarters ended March 31, June 30, and September 30, 1997,
respectively; (vi) Century's unaudited consolidated financial statements and
management's discussion and analysis of financial condition and results of
operations contained in its Quarterly Report on Form 10-Q for the quarters ended
March 31, June 30, and September 30, 1997, respectively; (vii) certain financial
analyses and forecasts of Bancshares prepared by and reviewed with management of
Bancshares and the views of senior management of Bancshares regarding
Bancshares' past and current business operations, results thereof, financial
condition and future prospects; (viii) certain financial analyses and forecasts
of Century prepared by and reviewed with management of Century and the views of
senior management of Century regarding Century's past and current business
operations, results thereof, financial condition and future prospects; (ix) the
pro forma impact of the Merger on Bancshares; (x) the publicly reported
historical price and trading activity for the Bancshares Common Shares and the
Century Common Shares, including a comparison of certain financial and stock
market information for Bancshares and Century with similar publicly available
information for certain other companies the securities of which are publicly
traded; (xi) the financial terms of recent business combinations in the banking
industry, to the extent publicly available; (xii) the current market environment
generally and the banking environment in particular; and (xiii) such other
information, financial studies, analyses and investigations, and financial,
economic, and market criteria as Sandler O'Neill considered relevant.
 
     In connection with rendering the Sandler O'Neill Fairness Opinion, Sandler
O'Neill confirmed the appropriateness of its reliance on the analyses used to
render its December 3, 1997 opinion by performing
 
                                      -28-
<PAGE>   43
 
procedures to update certain of such analyses and by reviewing the assumptions
upon which such analyses were based and the factors considered in connection
therewith.
 
     In performing its reviews and analyses, Sandler O'Neill assumed and relied
upon, without independent verification, the accuracy and completeness of all the
financial information, analyses and other information that was publicly
available or otherwise furnished to, reviewed by or discussed with it, and
Sandler O'Neill does not assume any responsibility or liability therefor.
Sandler O'Neill did not make an independent evaluation or appraisal of the
specific assets, the collateral securing assets or the liabilities (contingent
or otherwise) of Bancshares or Century or any of their subsidiaries, or the
collectibility of any such assets, nor was it furnished with any such
evaluations or appraisals (relying, where relevant, on the analyses and
estimates of Bancshares and Century). Sandler O'Neill is not an expert in the
evaluation of allowances for loan losses and it has not made an independent
evaluation of the adequacy of the allowance for loan losses of Bancshares or
Century, nor has it reviewed any individual credit files relating to Bancshares
or Century. With Bancshares' consent, Sandler O'Neill has assumed that the
respective aggregate allowances for loan losses for both Bancshares and Century
are adequate to cover such losses and will be adequate on a pro forma basis for
the combined entity. In addition, Sandler O'Neill has not conducted any physical
inspection of the properties or facilities of Bancshares or Century. With
respect to all financial information and projections reviewed with each
company's management, Sandler O'Neill assumed, with Bancshares' consent, that
they had been reasonably prepared on bases reflecting the best currently
available estimates and judgments of the respective managements of the
respective future financial performances of Bancshares and Century and that such
performances will be achieved. Sandler O'Neill expressed no opinion as to such
financial projections or the assumptions on which they were based.
 
     Sandler O'Neill's opinion was necessarily based upon market, economic and
other conditions as they existed on, and could be evaluated as of, the date of
such opinion. Sandler O'Neill assumed, in all respects material to this
analysis, that all of the representations and warranties contained in the Merger
Agreement and all related agreements are true and correct, that each party to
such agreements will perform all of the covenants required to be performed by
such party under such agreements and that the conditions precedent in the Merger
Agreement are not waived. Sandler O'Neill also assumed, with Bancshares'
consent, that there has been no material change in Bancshares' and Century's
assets, financial condition, results of operations, business, or prospects since
the date of the last financial statements filed pursuant to the requirements of
the Securities Exchange Act of 1934, as amended, and noted above, that the
Merger will be accounted for as a pooling of interests, that Bancshares and
Century will remain as going concerns for all periods relevant to its analyses
and that the Merger will qualify as a tax-free reorganization for federal income
tax purposes.
 
     Under the Sandler O'Neill Agreement, Bancshares will pay Sandler O'Neill a
transaction fee in connection with the Merger, a substantial part of which is
contingent upon the consummation of the Merger. Under the terms of the Sandler
O'Neill Agreement, Bancshares will pay Sandler O'Neill a transaction fee of
$500,000, of which $200,000 has been paid and the remainder of which will be
paid when the Merger is consummated. Bancshares has also agreed to indemnify
Sandler O'Neill and its affiliates and their respective partners, directors,
officers, employees, agents and controlling persons against certain expenses and
liabilities, including liabilities under securities laws.
 
     Sandler O'Neill has in the past provided and may in the future provide
other financial advisory services to Bancshares and has received and will
receive compensation for such services. In the ordinary course of its business,
Sandler O'Neill may actively trade the equity securities of Bancshares and
Century and their respective affiliates for its own account and for the accounts
of customers and, accordingly, may at any time hold a long or short position in
such securities.
 
DESCRIPTION OF THE MERGER
 
     Upon consummation of the transactions contemplated under the Merger
Agreement, Century will be merged with and into Bancshares. Bancshares will be
the surviving corporation after the Merger and the Articles of Incorporation and
Code of Regulations of Bancshares will remain in effect as they were immediately
prior to the Merger (subject however, to changes resulting from the approval of
the Articles Amendment and the Regulations Amendment by the Bancshares'
shareholders). See "INFORMATION CONCERNING THE BANCSHARES
 
                                      -29-
<PAGE>   44
 
SPECIAL MEETING -- Matters to be Considered by the Bancshares Shareholders."
After the Merger, CNB will become a wholly-owned subsidiary of Bancshares for a
period of approximately six (6) months after the consummation of the Merger. See
also "PROPOSED MERGER -- Operations of Century After the Merger."
 
CONSIDERATION FOR CENTURY COMMON SHARES
 
     Upon consummation of the Merger, each shareholder of Century who does not
dissent will have the right to receive 0.425 Bancshares Common Shares for each
of his or her Century Common Shares held, plus cash in lieu of the issuance of
fractional shares, subject to adjustment as set forth below (the "Conversion
Ratio"):
 
          (i) If the Average NMS Closing Price (as defined below) is greater
     than $67.50, then each outstanding Century Common Share will be converted
     into that number of Bancshares Common Shares that results from dividing
     $28.70 by the Average NMS Closing Price; provided however, that if prior to
     the effective time of the Merger, Bancshares publicly announces that it has
     agreed to a transaction in which control of Bancshares will be acquired by
     another company, then in no event will the conversion ratio be less than
     .3976; or
 
          (ii) If the Average NMS Closing Price is less than $56.50, but greater
     than or equal to $54.25, then each outstanding Century Common Share will be
     converted into that number of Bancshares Common Shares that results form
     dividing $24.00 by the Average NMS Closing Price; or
 
          (iii) If the Average NMS Closing Price is less than $54.25, then each
     outstanding Century Common Share will be converted into .4424 Bancshares
     Common Shares.
 
     The term "NMS Closing Price" means the price per share of the last sale of
Bancshares Common Shares reported on the Nasdaq National Market System at the
close of the trading day by the National Association of Securities Dealers, Inc.
The term "Average NMS Closing Price" means the arithmetic mean of the NMS
Closing Prices for the ten (10) trading days immediately preceding the fifth
(5th) trading day prior to the consummation of the Merger.
 
PAYMENT OF CASH IN LIEU OF FRACTIONAL SHARES
 
     No fractional Bancshares Common Shares will be issued in connection with
the Merger. Each Century shareholder who would otherwise have been entitled to
receive a fraction of a Bancshares Common Share will receive, in lieu thereof,
cash therefor, without interest, at an amount equal to such fractional part of a
Bancshares Common Share multiplied by the Average NMS Closing Price.
 
CENTURY STOCK OPTIONS
 
     With respect to Century Common Shares granted by Century under the Century
Financial Corporation Stock Option Plan ("Century Options"), which are
outstanding at the Effective Time (as defined herein), whether or not then
exercisable, will be converted into options to purchase Bancshares Common Shares
in accordance with the terms of the Century Financial Corporation Stock Option
Plan and the Stock Option Agreements for the Century Options. The number of
Bancshares Common Shares subject to a Century Option will be equal to the number
of Century Common Shares subject to such Century Option immediately prior to the
Effective Time, multiplied by the Conversion Ratio. The purchase exercise price
under a Century Option will be adjusted by dividing the per share exercise price
by the Conversion Ratio, rounded to the nearest cent.
 
OTHER PROVISIONS OF THE MERGER AGREEMENT
 
  Representations and Warranties
 
     The Merger Agreement contains representations and warranties by the parties
regarding, among other things, their respective organization, authority to enter
into the Merger Agreement, capitalization, properties, loans and investments,
pending and threatened litigation, contractual obligations, compliance with
applicable laws and regulations, financial statements and filings with
regulatory agencies. These representations and warranties will not survive
consummation of the Merger. The Merger Agreement includes certain exceptions to
Bancshares' and Century's representations and warranties, none of which are
deemed material to this transaction. Such exceptions
 
                                      -30-
<PAGE>   45
 
are contained in the disclosure schedule to the Merger Agreement which may be
reviewed upon request to Tracey L. Reeder of Bancshares, 10 East Main Street,
Salineville, Ohio 43945 or to Donald A. Benziger of Century, One Century Place,
Rochester, Pennsylvania 15074.
 
  Conditions to the Merger
 
     The obligations of Century and Bancshares to consummate the Merger are
subject to, but not limited to the following conditions: (1) the accuracy of
Century's and Bancshares' representations and warranties on and as of the
closing date of the Merger; (2) no material adverse change in the financial
condition, results of operations, business or assets of Century and Bancshares;
(3) the granting of all necessary regulatory approvals, including but not
limited to the Federal Reserve Board and the Commission; (4) the issuance by
Bancshares' general counsel and Century's counsel of opinions covering certain
matters with respect to Bancshares and Century, (5) neither the consummation nor
performance of the transactions under the Merger Agreement will conflict with,
or result in a material violation of, or cause Bancshares or Century or their
respective affiliates to suffer any material adverse consequences under any law
or order applicable to, or proposed to be applicable to them; (6) the
registration statement with the Securities and Exchange Commission registering
the exchange of the Bancshares Common Shares for Century Common Shares and all
state securities and "blue sky" permits have become effective and no stop orders
or similar restraining orders shall have been issued; (7) the receipt by
Bancshares of an opinion letter from Crowe, Chizek and Company LLP stating that
the transaction qualifies for treatment as a "pooling of interests" for
financial statement reporting purposes; and (8) the Merger shall have been
approved by the affirmative vote of the holders of a majority of the outstanding
Century Common Shares and the affirmative vote of two-thirds of the outstanding
Bancshares Common Shares.
 
     Bancshares' obligations under the Merger Agreement are also conditioned on,
among other conditions: (1) the holders of no more than (10%) of the Century
Common Shares having asserted dissenters' rights; (2) Century and CNB conducting
business in the ordinary and usual course; (3) there having been no event
constituting an event of default under any material indenture, agreement, note,
mortgage or guaranty that materially adversely affects Century's financial
condition; (4) the receipt by Bancshares of a fairness opinion from Sandler
O'Neill dated as of the date of this Joint Proxy Statement/Prospectus, stating
that the Conversion Ratio is fair from a financial point of view to Bancshares;
and (5) each of Donald A. Benziger, Edwin C. Schaffnit, C. David Becker and
Joseph N. Tosh, II shall have entered into employment agreements in the forms
attached as exhibits to the Merger Agreement.
 
     Century's obligations under the Merger Agreement are also subject to, among
other conditions: (1) the receipt of a fairness opinion from Danielson
Associates updated to the date of this Joint Proxy Statement/Prospectus stating
that the Merger is fair from a financial point of view to Century shareholders;
and (2) the receipt of an opinion of Century's counsel, reasonably satisfactory
in form and substance to Century, to the effect that the Merger will constitute
a tax-free reorganization within the meaning of Section 368(a)(1)(A) of the IRC,
no gain or loss will be recognized by Century as a consequence of the Merger,
and no gain or loss will be recognized by the shareholders of Century pursuant
to the terms of the Merger (except for the effect of any cash received pursuant
to dissenters' rights).
 
     The foregoing disclosure regarding conditions to the Merger represents and
includes all material conditions to the consummation thereof.
 
  Amendments; Termination
 
     The Merger Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment. The Merger Agreement may
be terminated as follows: (i) by mutual consent of the parties; (ii) by Century
if the Average NMS Closing Price is less than $46.50; (iii) by Century if (a)
the Average NMS Closing Price is less than $54.25 and (b) Bancshares' Average
NMS Closing Price is more than ten percent (10%) lower than the average of the
NMS Closing Price of an index of selected, publicly traded, peer group,
commercial banking institutions in Ohio, Pennsylvania and West Virginia; or (iv)
by either party if the transactions contemplated by the Merger Agreement are not
consummated by September 30, 1998 or (v) in the
 
                                      -31-
<PAGE>   46
 
event of a material breach by the other party, which breach is not cured after
thirty (30) days written notice to the breaching party.
 
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
     The Merger is structured to qualify as a tax free reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended, such that it is
anticipated that no gain or loss will be recognized by Century or Bancshares as
a result of the Merger. Nor is it expected that shareholders of Century will
recognize gain or loss upon the exchange of their Century Common Shares for
newly issued Bancshares Common Shares, except for cash received in exchange for
fractional interests. Assuming the Merger is treated as a tax-free
reorganization, the federal income tax basis of the Bancshares Common Shares
received by the shareholders of Century will be the same as the federal income
tax basis of the Century Common Shares surrendered in exchange therefor and the
holding period of the Bancshares Common Shares received by the shareholders of
Century will include the holding period of the Century Common Shares surrendered
in exchange therefor, provided that the Century Common Shares were held as a
capital asset on the date of the exchange.
 
     Shareholders who exercise their dissenters' rights of appraisal and receive
cash for their Century Common Shares will be treated as having received a
distribution in redemption of their shares, which will result in such
shareholders realizing income for federal income tax purposes. Furthermore,
shareholders of Century who receive cash in lieu of fractional interests in
Bancshares Common Shares as a result of the exchange will also be treated as
having received a distribution in redemption of their proportionate interest in
Century, which will result in such shareholders realizing income for federal
income tax purposes. The amount of such income and the tax treatment thereof
will depend on a number of factual considerations particular to the individual
shareholder.
 
     The discussion of federal income taxes is included herein for general
information only. EACH CENTURY SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PROPOSED
MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE AND LOCAL INCOME AND OTHER
TAX LAWS.
 
ACCOUNTING TREATMENT
 
     The Merger is expected to qualify as a "pooling of interests" for
accounting and financial reporting purposes. The pro forma results of this
accounting treatment are shown in the unaudited pro forma financial information
appearing elsewhere in this Joint Proxy Statement/Prospectus. See "PRO FORMA
FINANCIAL INFORMATION."
 
     As noted above, it is a condition to the obligation of Bancshares and
Century to consummate the Merger that Bancshares shall have received a letter
from its auditors, Crowe, Chizek and Company LLP, to the effect that the Merger
will qualify as a pooling of interests transaction under generally accepted
accounting principles. Among the conditions which must be met in order for the
Merger to qualify for "pooling of interests" accounting treatment, generally
accepted accounting principles require that, in the aggregate, no more than 10%
of Century Common Shares be held by Century shareholders who have exercised
dissenters' rights in connection with the Merger and demanded payment in cash
for the value of their Century common shares under Subchapter D or receive cash
in lieu of fractional shares. In the event such condition is not met, the Merger
would not be consummated unless the condition was waived by Bancshares and
Century. Furthermore, in order to qualify for "pooling of interests" accounting
treatment, no affiliate of either Bancshares or Century may reduce his or her
risk relative to the Bancshares Common Shares received in the Merger until such
time as financial results covering at least 30 days of post-merger combined
operations have been published.
 
INTEREST OF CENTURY MANAGEMENT IN THE MERGER
 
     Three members of Century's Board of Directors will be appointed to serve on
the Bancshares' Board of Directors, namely, Del E. Goedeker, Joseph N. Tosh, II
and Charles I. Homan, one of whom will be designated for membership on the
Executive Committee of the Bancshares Board of Directors. Four members of
Century's Board of Directors, namely, Del E. Goedeker, Charles I. Homan, Joseph
N. Tosh, II and Thomas K. Reed, will be elected by Bancshares (as the sole
shareholder of Citizens) to serve on the Board of Directors of Citizens. Those
                                      -32-
<PAGE>   47
 
four individuals will continue to serve on the CNB Board of Directors until the
CNB Merger. The remaining members of the CNB Board of Directors will be given
the opportunity to serve on an advisory board to Citizens to be known as the
"Century Advisory Board."
 
     Furthermore, Donald A. Benziger, Edwin C. Schaffnit and C. David Becker
have entered into employment agreements with CNB that Bancshares has agreed to
assume upon consummation of the Merger. Joseph N. Tosh, II will enter into an
employment agreement with Bancshares on the Closing Date, which shall go into
effect at the Effective Time.
 
EXPENSES OF THE MERGER
 
     Bancshares and Century shall each bear its respective expenses incurred in
connection with the Merger and the transactions contemplated thereby, including
without limitation, all fees of their respective legal counsel, financial
advisors and accountants. Bancshares shall be responsible for all expenses
incident to obtaining requisite regulatory approvals.
 
REGULATORY APPROVALS
 
     Bancshares has filed the application necessary to obtain the approval for
the Merger from the Federal Reserve Board. The Merger may not be consummated for
15 days after approval by the Federal Reserve Board, during which time an action
may be brought by the United States Department of Justice challenging the Merger
on antitrust grounds. Bancshares has no reason to believe the Merger will be
challenged on antitrust grounds.
 
EFFECTIVE TIME OF THE MERGER
 
     As used in this Joint Proxy Statement/Prospectus, "Effective Time" means
the date and time when the Merger becomes effective, which will occur upon the
filing of a Certificate of Merger with the Ohio Secretary of State and Articles
of Merger with the Department of State of the Commonwealth of Pennsylvania.
 
OPERATIONS OF CENTURY AFTER THE MERGER
 
     Pursuant to the terms of the Merger Agreement, Century shall be merged with
and into Bancshares and Bancshares shall be the surviving corporation (the
"Surviving Corporation") as of the Effective Time. CNB shall become a
wholly-owned subsidiary of Bancshares. The Articles of Incorporation and Code of
Regulations of Bancshares existing immediately prior to the Merger (except as
amended as proposed in this Joint Proxy Statement/Prospectus) shall become the
Articles of Incorporation and Code of Regulations of the Surviving Corporation
until thereafter duly altered, amended or repealed in accordance with applicable
law. In addition, each Bancshares Common Share issued and outstanding
immediately prior to the Effective Time shall thereafter continue to be one
common share of the Surviving Corporation.
 
     Each director of Bancshares immediately prior to the Effective Time shall
remain a director of the Surviving Corporation and shall serve for the balance
of his term and until his successor is duly elected and qualified or until his
earlier death, resignation or removal in the manner provided in the Code of
Regulations or as otherwise provided by law. Furthermore, each person who is an
officer of Bancshares prior to the Effective Time shall remain an officer of the
Surviving Corporation. For further information regarding the directors and
officers of Bancshares and the Surviving Corporation, see "INFORMATION WITH
RESPECT TO BANCSHARES -- Management."
 
     For a period of approximately six (6) months after the Merger, CNB will be
operated as a separate banking subsidiary of Bancshares. It is intended that
Bancshares will merge CNB with and into Citizens. Bancshares will offer the
existing employees of Century the opportunity to continue as employees of CNB
for a period ending December 31, 1998. As provided in the Merger Agreement, this
commitment of Bancshares shall not be deemed to be a contract of employment or
be construed to give the employees any rights other than as employees at will
under applicable law. During the interim period prior to the CNB Merger, a
committee of three (3) employees of each of CNB and Citizens will be established
to evaluate and make recommendations to the Bancshares' Board of Directors with
respect to the combination and merger of their respective employee benefit
plans. Upon
 
                                      -33-
<PAGE>   48
 
consummation of the CNB Merger, all Century and CNB employees who become
employees of Citizens or one of Bancshares' other affiliates will have their
years of service with Century and its predecessors credited for eligibility and
vesting purposes, (but not for accrual of benefit purposes) under all
Bancshares' employee pension benefit plans (as defined in Section 3(2) of ERISA)
and other fringe benefit programs (including vacation), except with respect to
Bancshares' ESOP plan.
 
     Upon completion of the Merger, CNB will be operated as a subsidiary of
Bancshares for a period of not more than six (6) months and the Century name
will continue to be featured in all CNB signage and literature. Given the
notable recognition associated with the "Century" name, Bancshares may continue
to use the Century name as appropriate in the markets serviced by CNB or in
other applications to be determined by Bancshares.
 
BUSINESS PENDING THE MERGER
 
     The Merger Agreement provides that, pending consummation of the Merger,
Century will continue to operate in the ordinary course. Without the written
consent of Bancshares, Century and CNB will not: (i) do any things that they
represent and warrant in the Merger Agreement have not been done except as
necessary to carry out the terms of the Merger Agreement; (ii) engage in any
transaction that would be inconsistent with or cause a breach of any
representations or warranties; or (iii) engage in any lending activities other
than in the ordinary course of business consistent with past practice.
Bancshares has been given the opportunity to review, comment and make reasonable
recommendations on all loan presentations made to CNB's loan committee. Century
and Bancshares have agreed to consult with each other prior to the hiring of any
full-time employees of Century or CNB, other than replacement employees for
positions then existing.
 
     In the Merger Agreement, Century has agreed that it will not, directly or
indirectly, through any of its officers, directors, employees, agents or
advisors or other representatives or consultants, solicit or initiate or
knowingly encourage, including by means of furnishing information, any proposals
or offers from any person (other than Bancshares) relating to any acquisition or
purchase of all or a material amount of the assets of, or any securities of, or
any merger, tender offer, consolidation or business combination with, Century.
Century has agreed to promptly notify Bancshares, orally and in writing, if any
such proposal or offer is made and shall, in any such notice, indicate the
identity and terms and conditions of any proposal or offer, or any such inquiry
or contact.
 
STOCK OPTION AGREEMENT
 
     On November 17, 1997, Bancshares entered into a Stock Option Agreement with
Century that grants Bancshares a binding option to purchase up to 19.9% of the
outstanding Century Common Shares at an exercise price of $18.00 per share in
certain circumstances.
 
     Bancshares may exercise the binding option at any time or upon the
occurrence of any of the following events: (i) Century enters into an agreement
with any person to merge, consolidate or acquire all or substantially all of the
assets of Century or for the purchase or acquisition of securities representing
10% or more of the voting power Century; (ii) any person (other than Bancshares)
acquires beneficial ownership or the right to acquire beneficial ownership of
19.9% or more of the outstanding Century Common Shares after the date of the
Stock Option Agreement; (iii) any person makes a bona fide takeover proposal to
Century by public announcement or written communication that is or becomes the
subject of public disclosure, and, following such bona fide takeover proposal,
the Century shareholders vote not to approve the Merger between Bancshares and
Century; (iv) Century breaches the Stock Option Agreement in any material
respect, which breach shall not have been cured within 15 days after notice; or
(v) Century breaches the Merger agreement between Bancshares and Century
following a bona fide takeover proposal.
 
     Bancshares' binding option may be terminated in any of the following
manners: (i) by mutual consent of Bancshares and Century; (ii) by either
Bancshares or Century if the Federal Reserve Board issues an order denying
approval of the Merger of Bancshares and Century or if any other governmental
entity issues a final permanent order enjoining or otherwise prohibiting
consummation of the Merger; (iii) by either Bancshares or Century if the Merger
has not been consummated on or before September 30, 1998; or (iv) by either
Bancshares
 
                                      -34-
<PAGE>   49
 
or Century if no purchase event has occurred and by either Bancshares' or
Century's shareholder fail to approve the Merger.
 
     The Stock Option Agreement has been filed as Exhibit 10(16) to Bancshares
Annual Report on Form 10-K for the year ended December 31, 1997 and Exhibit (a)
to the Schedule 13D of Bancshares filed with the Commission on November 26,
1997, and is incorporated herein by reference.
 
SURRENDER OF CERTIFICATES
 
     After the Effective Time, each holder of an outstanding certificate or
certificates for Century Common Shares converted into Bancshares Common Shares
will be entitled to receive a certificate or certificates representing the
number of whole Bancshares Common Shares into which such holder's Century Common
Shares were converted and, if applicable, a cash payment in lieu of any
fractional share. Each holder of Century Common Shares will surrender the
outstanding certificate(s) to Bancshares' designated exchange agent (the
"Exchange Agent").
 
     As soon as reasonably practicable after the Effective Time, Bancshares
shall mail to each holder of record of Century Common Shares (i) notice that the
Merger has been consummated and instructions for effecting the surrender of the
Century Common Share certificate(s) in exchange for Bancshares Common Share
certificate(s) and (ii) a letter of transmittal that may be used to surrender
Century Common Share certificate(s) to the Exchange Agent.
 
     Upon surrender of the Century Common Share certificate(s) for cancellation
to the Exchange Agent, together with a completed letter of transmittal and any
other documents reasonably requested, the holder of the Century Common Share
certificate(s) will be entitled to receive that number of whole Bancshares
Common Shares that such holder has the right to receive under the Merger
Agreement and the surrendered Century Common Share certificate(s) will be
canceled.
 
     In the event of a lost certificate, the Century shareholder shall provide,
in lieu of the lost certificate, (i) a request for a replacement certificate,
(ii) an indemnity agreement and (iii) other reasonable items (including an
affidavit and a surety bond) requested by Century in accordance with Article VI,
Section 6.02 of Century's By-Laws.
 
     In the event of a transfer of ownership of Century Common Shares that are
not registered in the transfer records of Century, a certificate representing
the proper number of Bancshares Common Shares may be issued to a transferee if
the Century certificate representing such Century Common Shares is presented to
the Exchange Agent, accompanied by all documents required by Bancshares to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
 
     After the consummation of the Merger, there will be no transfers on the
stock transfer books of Century of any Century Common Shares. If, after the
consummation of the Merger, certificates for Century Common Shares are properly
presented to Bancshares, they will be canceled and exchanged for the
consideration specified in the Merger Agreement, subject to applicable law and
to the extent that Bancshares has not paid such consideration to a public
official pursuant to applicable abandoned property laws.
 
RESALE OF BANCSHARES COMMON SHARES
 
     No restrictions on the sale or other transfer of the Bancshares Common
Shares issued pursuant to the Merger will be imposed solely as a result of the
Merger, except for restrictions on the transfer of shares issued to any Century
shareholder who may be deemed to be an "affiliate" of Century for purposes of
Rule 145 under the 1933 Act. Generally, "affiliates" of Century would include
officers, directors and significant shareholders of Century. The Merger
Agreement requires Century to cause persons who could be considered to be
"affiliates" to enter into an agreement with Bancshares to the effect that the
Bancshares Common Shares to be acquired by such "affiliates" will not be sold,
pledged, transferred or otherwise disposed of except in compliance with the 1933
Act and the rules and regulations thereunder. Sales of Bancshares Common Shares
by affiliates of Bancshares are subject to similar transfer restrictions.
 
                                      -35-
<PAGE>   50
 
     Bancshares Common Shares issued to Century shareholders who may be deemed
to be affiliates may be resold only (i) in transactions permitted by Rule 145
promulgated under the 1933 Act, (ii) pursuant to an effective registration
statement, or (iii) in transactions exempt from registration. Rule 145, as
currently in effect, imposes restrictions on the manner in which such affiliates
may make resales and also on the quantity of resales that such affiliates, and
others with whom they might act in concert, may make within any three month
period.
 
RIGHTS OF DISSENTING BANCSHARES SHAREHOLDERS
 
     Shareholders of Bancshares are entitled to certain dissenters' rights
pursuant to Section 1701.85 of the Ohio Revised Code. Section 1701.85 generally
provides that shareholders of Bancshares will not be entitled to such rights
absent compliance with Section 1701.85 and failure to take any one of the
required steps may result in the termination or waiver of such rights.
Specifically, any Bancshares shareholder who is a record holder of Bancshares
Common Shares on the Record Date and whose shares are not voted in favor of the
Merger may be entitled to be paid the "fair cash value" of such Bancshares
Common Shares after the Effective Time. To be entitled to such payment, a
shareholder must deliver a written demand for payment therefor to Bancshares on
or before the tenth day following the Special Meeting and must otherwise comply
with Section 1701.85. Any written demand must specify the shareholder's name and
address, the number and class of shares held by him or her on the Record Date,
and the amount claimed as the "fair cash value" of said Bancshares Common
Shares. See the text of Section 1701.85 of the Ohio Revised Code attached as
Appendix B to this Joint Proxy Statement/Prospectus for specific information on
the procedure to be followed in exercising dissenters' rights.
 
     If the Surviving Corporation so requests, dissenting shareholders must
submit their share certificates to Bancshares within fifteen days of such
request, for endorsement thereon by Bancshares that demand for appraisal has
been made and failure to comply with such request could terminate the dissenting
shareholders rights. Such certificates will be promptly returned to the
dissenting shareholders by Bancshares. If Bancshares and any dissenting
shareholder cannot agree upon the "fair cash value" of the Bancshares Common
Shares, either may, within three months after service of demand by the
shareholder, file a petition in the Court of Common Pleas of Columbiana County,
Ohio (the "Court") for a determination of the "fair cash value" of said
Bancshares Common Shares. The Court may appoint one or more appraisers to
determine the "fair cash value" and if the Court approves the appraisers'
report, judgment will be entered therefor, and the costs of the proceedings,
including reasonable compensation of the appraisers, will be assessed or
apportioned as the Court considers equitable.
 
RIGHTS OF DISSENTING CENTURY SHAREHOLDERS
 
     The rights of dissenting shareholders of Century Financial Corporation are
governed by Subchapter D of Chapter 15 of the Pennsylvania Business Corporation
Law of 1988, as amended ("Subchapter D"). Subchapter D provides holders of
Century Common Shares with the right to dissent from the Merger and obtain
payment of the "fair value" of such shares in the event that the Merger is
consummated. The term "fair value" means the value of a share of Century's
Common Shares immediately before consummation of the Merger taking into account
all relevant factors, but excluding any appreciation or depreciation in
anticipation of the Merger. A copy of the applicable statute is set forth in
Appendix C hereto. The following summary of such provisions is qualified in its
entirety by reference to Appendix C.
 
     A shareholder desiring to exercise dissenters' rights must satisfy all of
the following conditions. The shareholder must (i) prior to the vote upon the
Merger at the Century Special Meeting submit a written notice to Century of the
shareholder's intention to demand payment of the fair value of the shareholder's
shares if the Merger is effectuated; (ii) effect no change in the beneficial
ownership of the shares from the date of such filing continuously through the
consummation of the Merger; and (iii) refrain from voting the shares for
approval of the Merger Agreement. The written notice referred to in clause (i)
must be in addition to and separate from voting against, abstaining from voting,
or failing to vote on approval of the Merger Agreement. Voting against,
abstaining from voting or failing to vote on approval of the Merger Agreement
will not constitute written notice of an intent to demand payment for Century
Common Shares within the meaning of Subchapter D. Any written notice or demand
which is required in connection with the exercise of dissenters' rights must
include the name,
 
                                      -36-
<PAGE>   51
 
address and telephone number of the shareholder and must be sent to: Joseph N.
Tosh, II, President and Chief Executive Officer, Century Financial Corporation,
One Century Place, Rochester, Pennsylvania 15074.
 
     In the event a shareholder votes for approval of the Merger Agreement, or
delivers a proxy in connection with the Century Special Meeting (unless the
proxy specifies a vote against, or an abstention from voting on, approval of the
Merger Agreement), the shareholder will have waived the dissenters' rights and
will have nullified any written notice of an intent to demand payment submitted
by such holder. Failure to submit a proxy specifying a vote against or
abstention from voting on the Merger does not waive a shareholder's dissenters'
rights.
 
     A Century shareholder may assert dissenters' rights as to less than all of
the shares registered in such holder's name only if such record holder dissents
with respect to all shares owned by any one beneficial owner and discloses the
name and address of each person on whose behalf such holder dissents. The rights
of a partial dissenter are determined as if the shares as to which the record
holder dissents and record holder's remaining shares were registered in the
names of different shareholders. A beneficial owner may assert dissenters'
rights as to shares held on such owner's behalf only if such owner submits to
Century the record holder's written consents to the dissent no later than the
time the beneficial owner asserts his or her dissenters' rights. A beneficial
owner may not dissent with respect to less than all shares of the same class or
series owned by the beneficial owner, whether or not the shares owned by such
beneficial owner are registered in such beneficial owner's name.
 
     If the Merger Agreement is approved, Century will deliver a dissenters'
notice to all holders who have satisfied the foregoing requirements. Such notice
will instruct the holder on the procedure for obtaining payment and will include
a copy of Subchapter D. Failure to strictly follow the procedures set forth in
Subchapter D regarding perfection of dissenters' rights may result in a loss of
the right to payment.
 
     The foregoing is only a summary of the rights of a dissenting shareholder
of Century. Any shareholder who intends to dissent from the Merger should
carefully review the applicable provisions of Subchapter D and should also
consult with his or her attorney. The failure of a shareholder to follow
precisely the procedures summarized above may result in loss of dissenters'
rights. No further notice of the events giving rise to dissenters' rights or any
steps associated therewith will be furnished to Century shareholders, except as
indicated above or otherwise required by law.
 
                    DESCRIPTION OF BANCSHARES CAPITAL SHARES
 
GENERAL
 
     Bancshares has authorized 12,000,000 Common Shares, without par value, of
which 5,897,540 shares are issued and outstanding and 2,250 are held in
treasury. Each outstanding Bancshares Common Share is duly authorized, validly
issued, fully paid and nonassessable. The holders of Bancshares Common Shares
have one vote per share on each matter on which shareholders are entitled to
vote and, in accordance with Ohio law, cumulative voting rights may be requested
in connection with the election of directors. Directors are elected for
staggered, three year terms. Specifically, the Board is divided into three
classes with three to four directors per class and with the members of one class
being elected annually. On liquidation or dissolution of Bancshares, the holders
of Bancshares Common Shares are entitled to share ratably in such assets as
remain after creditors have been paid.
 
     In addition, Bancshares has authorized 200,000 shares of serial preferred
stock ("Serial Shares"), none of which are currently outstanding. The terms of
the Serial Shares are to be established by Bancshares' Board of Directors;
therefore, if Bancshares were to issue Serial Shares in the future, holders
thereof might have preference over the holders of Bancshares Common Shares in
the event of a liquidation or dissolution and may have other rights which are
superior to or in addition to the rights of holders of Bancshares Common Shares.
Serial Shares have a par value of $10.00 per share. Bancshares Common Shares
have no par value. Holders of Bancshares Common Shares have no preemptive
rights, subscription rights or conversion rights.
 
     Bancshares' Board of Directors determines whether to declare dividends and
the amount of any dividends declared. Such determinations by the Board of
Directors take into account Bancshares' financial condition, results of
operations and other relevant factors. While management expects to maintain its
policy of paying regular cash dividends, no assurances can be given that any
dividends will be declared, or, if declared, what the amount of
                                      -37-
<PAGE>   52
 
such dividends will be. See "INFORMATION WITH RESPECT TO BANCSHARES -- Market
Price of Bancshares Common Shares."
 
     Bancshares is the transfer agent and registrar for Bancshares Common
Shares.
 
DESCRIPTION OF CONTROL SHARE ACQUISITION PROVISIONS
 
     Bancshares' Articles of Incorporation restrict certain acquisitions of
Bancshares Common Shares that meet the definition of a Control Share
Acquisition. A Control Share Acquisition is defined as the acquisition, directly
or indirectly, by any person, of Bancshares Common Shares that, when added to
all other shares of Bancshares in respect of which such person may exercise or
direct the exercise of voting power, would entitle such person, immediately
after such acquisition, directly or indirectly, to exercise or direct the
exercise of the voting power in the election of directors within any of the
following ranges of such voting power:
 
          (a) One-fifth or more but less than one-third of such voting power;
 
          (b) One-third or more but less than a majority of such voting power;
 
          (c) A majority or more of such voting power.
 
     The Articles of Incorporation provide for certain exceptions to this
definition, such as good faith acquisitions not for the purpose of circumventing
the Articles of Incorporation, bequests, inheritances and gifts, pledges or
other security interests created in good faith and not for the purpose of
circumventing the Articles of Incorporation, or pursuant to certain
shareholder-approved mergers, consolidations or majority share acquisitions. If
an acquisition of Bancshares Common Shares qualifies as a Control Share
Acquisition, authorization for such transaction must be obtained at a special
shareholder meeting held in accordance with procedures contained in the Articles
of Incorporation. If these procedures are violated, the person making such
acquisition loses certain shareholder rights.
 
  Procedures
 
     In order to obtain authorization for a Control Share Acquisition, the
person proposing to make such acquisition must deliver a notice to Bancshares
(the "Notice") including the following information:
 
          (a) The identity of the person who is giving the Notice;
 
          (b) A statement that the Notice is given pursuant to the Articles of
     Incorporation;
 
          (c) The number and class of shares of Bancshares owned, directly or
     indirectly, by the person who gives the Notice;
 
          (d) The range of voting power under which the proposed Control Share
     Acquisition would, if consummated, fall;
 
          (e) A description in reasonable detail of the terms of the proposed
     Control Share Acquisition; and
 
          (f) Reasonable evidence that the proposed Control Share Acquisition,
     if consummated, would not be contrary to law and that the person who is
     giving the Notice has the financial capacity to make the proposed Control
     Share Acquisition.
 
Within ten days of receiving the Notice, the Board of Directors must call a
special meeting of shareholders to be held not later than 50 days after receipt
of the Notice. The purpose of the special meeting of shareholders is to consider
the proposed Control Share Acquisition; provided, that the Board of Directors
shall have no obligation to call such meeting if they make a determination
within ten days after receipt of the Notice (i) that the Notice was not given in
good faith, (ii) that the proposed Control Share Acquisition would not be in the
best interests of Bancshares and its shareholders or (iii) that the proposed
Control Share Acquisition could not be consummated for financial or legal
reasons.
 
                                      -38-
<PAGE>   53
 
  Requirements for Approval
 
     The person who delivered the Notice may make the proposed Control Share
Acquisition if both of the following occur: (i) the shareholders authorize such
acquisition at the special meeting called by the Board of Directors for that
purpose, at which a quorum is present, by an affirmative vote of a majority of
the shares entitled to vote in the election of directors ("Voting Shares")
represented at such meeting in person or by proxy and by a majority of the
portion of such Voting Shares represented at such meeting in person or by proxy
excluding the votes of "Interested Shares"; and (ii) such acquisition is
consummated, in accordance with the terms so authorized, not later than 360 days
following shareholder authorization of the Control Share Acquisition.
"Interested Shares" are Voting Shares with respect to which any of the following
persons may exercise or direct the exercise of the voting power:
 
          (a) any person whose Notice prompted the calling of the meeting of
     shareholders;
 
          (b) any officer of Bancshares elected or appointed by the directors of
     Bancshares; and
 
          (c) any employee of Bancshares who is also a director of Bancshares.
 
  Violation of Restriction
 
     Bancshares Common Shares issued or transferred to any person in violation
of this restriction are valid only with respect to such amount of shares as does
not result in a violation of the Articles of Incorporation, and such issuance or
transfer is null and void with respect to the remainder of such shares. Any such
remainder of shares are called "Excess Shares." Excess Shares are not entitled
to any voting rights, are not considered to be outstanding for quorum or voting
purposes, and are not entitled to receive dividends, interest or any other
distribution with respect to the Excess Shares. Any person who receives
dividends, interest or any other distribution in respect to Excess Shares holds
the distribution as agent for Bancshares and, following a permitted transfer,
for the transferee. Any holder of Excess Shares may transfer the Excess Shares
(together with any distributions thereon) to any person who, following such
transfer, would not own shares in violation of the Articles of Incorporation.
Upon a permitted transfer, Bancshares will pay or distribute to the transferee
any distributions on the Excess Shares not previously paid or distributed.
 
           COMPARATIVE RIGHTS OF BANCSHARES AND CENTURY SHAREHOLDERS
 
INTRODUCTION
 
     The rights of Century shareholders are currently governed by the laws of
the Commonwealth of Pennsylvania, the Century Articles of Incorporation (the
"Century Articles") and the Century By-laws (the "Century By-laws"). Upon
consummation of the Merger, Century shareholders who receive Bancshares Common
Shares will become shareholders of Bancshares and their rights will be governed
by Ohio law, the Bancshares Articles of Incorporation, as amended (the
"Bancshares Articles") and the Bancshares Code of Regulations ("Bancshares
Regulations"), which differ in certain material respects from the laws of the
Commonwealth of Pennsylvania, the Century Articles and the Century By-laws. The
following is a summary of certain differences between the rights of Century
shareholders and those of Bancshares shareholders.
 
     The following summary does not purport to be a complete description of the
rights of shareholders of Century or the rights of shareholders of Bancshares or
a comprehensive comparison of such rights, and is qualified in its entirety by
reference to Pennsylvania and Ohio law, the Century Articles and Century
By-laws, and the Bancshares Articles and Bancshares Regulations.
 
AUTHORIZED SHARES
 
     The Century Articles provide for 8,000,000 Century Common Shares, par value
$.835 per share. The Bancshares Articles currently provide for 12,000,000
Bancshares Common Shares, without par value, and 200,000 Serial Preferred
Shares, par value $10.00. For a description of the proposed Bancshares Articles
Amendment see "INFORMATION CONCERNING THE BANCSHARES SPECIAL MEETING -- Matters
to be Considered at the Bancshares Special Meeting." No Serial Preferred Shares
are currently outstanding. The
 
                                      -39-
<PAGE>   54
 
rights of the holders of the Serial Preferred Shares when issued could be
superior to the rights of the holders of the Bancshares Common Shares.
 
CERTAIN VOTING RIGHTS
 
     Century's Articles require approval of any merger, consolidation or sale of
all or substantially all of the assets of Century by the affirmative vote of
either (1) at least seventy-five percent (75%) of the outstanding Century Common
Shares or (2) at least a majority of the outstanding Century Common Shares,
provided that such transaction has received the prior approval of at least
eighty percent (80%) of the entire Board of Directors.
 
     Under Ohio law, unless otherwise provided in the corporation's articles of
incorporation, mergers and other such matters require the approval of the
holders of shares entitling such holders to exercise at least two-thirds of the
voting power of the corporation. The Bancshares Articles require the affirmative
vote of two-thirds of the shares entitled to vote to (i) adopt any agreement for
the merger of consolidation of Bancshares with or into any other corporation or
(ii) authorize the sale, lease, exchange, transfer or other disposition of all
or substantially all of the assets of Bancshares. The Bancshares Articles also
provide for special voting procedures in the event of a Control Share
Acquisition. See "DESCRIPTION OF BANCSHARES CAPITAL STOCK -- Description of
Control Share Acquisition Provisions."
 
PREEMPTIVE RIGHTS
 
     The Century Articles provide that Century shareholders have preemptive
rights to purchase Century Common Shares. The Bancshares Articles have
eliminated preemptive rights for holders of Bancshares Common Shares.
 
CUMULATIVE VOTING
 
     The Century Article have eliminated cumulative voting rights with respect
to the election of directors. Under Ohio law, Bancshares shareholders have the
right to make a request, in accordance with applicable procedures, to cumulate
their votes with respect to the election of directors.
 
SPECIAL MEETINGS OF SHAREHOLDERS
 
     Under Pennsylvania law, a special meeting of the shareholders may be called
by the Board of Directors, any officer or other person as may be provided in the
By-laws. The Century By-laws provide that special meetings of shareholders may
be called by the Board of Directors, the Chairperson of the Board, the President
or by ten (10) or more shareholders entitled to cast at least twenty percent
(20%) of the votes which all shareholders are entitled to cast at the particular
meeting. A special meeting of a corporation having a class of securities
registered under the Securities Exchange Act are subject to the reporting
obligations of Section 15(d) of the Securities Exchange Act, including Century,
may be called, however, by an interested shareholder (i.e., the beneficial owner
of at least twenty percent (20%) of a corporation's outstanding voting shares)
for the purpose of approving certain business combinations.
 
     The Bancshares Regulations provide that special meetings may be called at
any time by the Chairman of the Board, the President, a Vice President or by the
directors by action at a meeting or a majority of the directors acting without a
meeting, or by shareholders holding at least fifty percent (50%) of the
outstanding shares entitled to vote at such meeting.
 
AMENDMENT OF CORPORATE GOVERNING DOCUMENTS
 
     Pennsylvania law allows amendments of the articles of incorporation if
either the board of directors adopts a resolution setting forth the proposed
amendment or shareholders entitled to cast at least ten percent (10%) of the
votes that all shareholders are entitled to cast thereon sign a petition setting
forth the proposed amendment, and the shareholders of the corporation thereafter
approve such proposed amendment either at the next annual or special meeting
called by the board for the purpose of approval of such amendment by the
shareholders. The Century Articles provide that, at any such meeting, if the
proposed amendment is in regard to cumulative voting rights, opposition of a
tender offer or other offer for the corporation's securities, voting
requirements for approval
 
                                      -40-
<PAGE>   55
 
of business combinations or voting requirements for amendments to the articles
of incorporation, the proposed amendment must be approved by the affirmative
vote of either the holders of at least seventy-five percent (75%) of the
outstanding Century Common Shares or the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the outstanding Century Common Shares, provided
that such amendment has received the prior approval of at least eighty percent
(80%) of the entire Board of Directors. All other amendments proposed at any
such meeting must be approved by a majority of the votes cast by all
shareholders entitled to vote thereon. The provision that amendments of the
articles of incorporation may be proposed by shareholders entitled to cast at
least ten percent (10%) of the votes that all shareholders are entitled to cast
thereon is generally not applicable to a registered corporation, including
Century.
 
     Ohio law permits the adoption of amendments to articles of incorporation if
such amendments are approved at a meeting held for such purpose by the holders
of shares entitling them to exercise two-thirds of the voting power of the
corporation, or such lesser, but not less than a majority, or greater vote as
specified in the corporation's articles of incorporation. Except for specific
provisions relating to an amendment with respect to (i) the Serial Preferred
Shares; (ii) the Control Share Acquisition procedures; or (iii) Sections 7, 9 or
10 of the Bancshares Regulations, the Bancshares Articles require the approval
of a majority vote of the outstanding shares voting as a class to amend the
Bancshares Articles.
 
     Under Pennsylvania law, the power to adopt, amend or repeal by-laws resides
with the shareholders entitled to vote thereon, and with the directors if such
power is conferred upon the board of directors by the by-laws, subject to the
power of the shareholders to change any such action by the board of directors.
Century's By-laws permit amendment or repeal of the By-laws, in whole or in
part, by a majority vote of the members of the Board of Directors.
 
     Under Ohio law, regulations may be adopted, amended or repealed only by
approval of the shareholders. They may be adopted or amended at a meeting of
shareholders by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power on such proposal or by written consent
signed by holders of shares entitling them to exercise two-thirds of the voting
power on such proposed amendment (or such lesser, but not less than a majority,
or greater vote as specified in the regulations). The Bancshares Regulations
provide that the Bancshares Regulations may be amended, in whole or in part, by
the affirmative vote of the holders of a majority of the shares entitled to
vote; provided, however, any amendment with respect to Sections 7, 9 or 10
requires the affirmative vote of at least seventy-five percent (75%) of the
shares entitle to vote, unless such amendment has been recommended by at least
two-thirds of the Board of Directors.
 
LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
 
     Pennsylvania law and Ohio law have provisions and limitations regarding
directors' liability and regarding indemnification by a corporation of its
officers, directors and employees.
 
     A director of an Ohio corporation shall not be found to have violated his
fiduciary duties to the corporation or its shareholders unless there is proof by
clear and convincing evidence that the director has not acted in good faith, in
a manner he reasonably believes to be in or not opposed to the best interests of
the corporation, or with the care that an ordinarily prudent person in a like
position would use under similar circumstances. In addition, under Ohio law a
director is liable in damages for any action or failure to act as a director
only if it is proved by clear and convincing evidence that such act or omission
was undertaken either with deliberate intent to cause injury to the corporation
or with reckless disregard for the best interests of the corporation, unless the
corporation's articles or regulations make this provision inapplicable by
specific reference. The Bancshares Articles do not make this provision
inapplicable.
 
     Ohio law limits a director's liability for breaches of the fiduciary duties
of care and loyalty. This standard does not apply, however, where the director
has acted either outside his capacity as a director or with respect to certain
dividends, distributions, purchases or redemptions of corporation shares or
loans, in the case of a corporation that does not have actively traded shares, a
change in control in which a majority of the shareholders receive a greater
consideration for their shares than other shareholders. Ohio law further
requires all expenses, including attorneys' fees, incurred by a director in
defending any action, suit or proceeding (other than one asserting only
liability for unlawful dividends, distributions or redemptions) to be paid by
the corporation as they
                                      -41-
<PAGE>   56
 
are incurred in advance of the final disposition of the action, suit or
proceeding if it receives an undertaking from or on behalf of the director in
which he agrees to repay such amounts if it is proved by clear and convincing
evidence that his action or failure to act involved an act or omission
undertaken with deliberate intent to cause injury to the corporation or
undertaken with reckless disregard for the best interests of the corporation and
if the director reasonably cooperates with the corporation concerning the
action, suit or proceeding.
 
     The Century By-laws and the Bancshares Regulations require each corporation
to indemnify current and former directors and officers, and permit each
corporation to indemnify current and former employees and agent, to the fullest
extent permitted by applicable state law.
 
     Under Pennsylvania law, a director, officer, employee or agent may, in
general, be indemnified by the corporation if he has acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Century By-laws
require such indemnification.
 
     Under Ohio law, a director, officer, employee or agent may, in general, be
indemnified by the corporation if he has acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. No indemnification may be
made under Ohio law or the Bancshares Regulations of any person on account of
conduct which is finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct, or in violation of applicable law.
 
     Pennsylvania law permits a Pennsylvania corporation to include a provision
in its articles of incorporation, or a provision adopted by its shareholders in
its by-laws, which eliminates or limits the personal liability of a director to
the corporation or its shareholders for monetary damages for breach of fiduciary
duties as a director. However, no such provision may eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its shareholders, (ii) for any breach or failure to perform
which constitutes self-dealing, willful misconduct or recklessness, (iii)
pursuant to any criminal statute, or (iv) for the payment of taxes. The Century
By-laws include such a provision.
 
CLASSIFICATION OF BOARD OF DIRECTORS
 
     Both Pennsylvania law and Ohio law permit, but do not require, the adoption
of a "classified" board of directors with staggered terms under which a part of
the board of directors is elected each year. Under Pennsylvania law, the maximum
term of each class of directors is four years, while in Ohio, the maximum term
for each class is three years. Century's Board of Directors is currently
comprised of three classes, with the members of each class standing for election
each year on a staggered basis for three-year terms. The Bancshares Board is
also classified into three classes, with members of each class standing for
election each year on a staggered basis for three-year terms.
 
REMOVAL OF DIRECTORS
 
     In general, under both Pennsylvania law and Ohio law, any or all of the
directors of a corporation may be removed by a vote of shareholders with or
without cause, except that Pennsylvania law authorizes removal by the
shareholders of a member of a classified board only for cause. Under
Pennsylvania law, if shareholders are entitled to vote cumulatively, a director
shall not be removed from the board if sufficient votes are cast against the
resolution for his or her removal which, if cumulatively voted at a regular
election of directors, would be sufficient to elect one or more directors to the
board.
 
     Under Ohio law, if the shareholders have a right to vote cumulatively in
the election of directors then, unless the articles or regulations provide
otherwise, all directors, all the directors of a particular class or any
individual director may be removed from office, without assigning cause, by the
vote of a majority of the voting power entitling them to elect directors;
provided, however, no individual shall be removed if the votes of a sufficient
number of shares are cast against his removal that, if cumulatively voted at an
election, would be sufficient to elect at least one director. The Bancshares
Regulations provide that all directors, all directors of a particular class
 
                                      -42-
<PAGE>   57
 
or any individual directors may be removed from office without assigning any
cause by the affirmative vote of at least seventy-five percent (75%) of the
shares entitled to vote.
 
PAYMENT OF DIVIDENDS
 
     Under Pennsylvania law a corporation has the power, subject to restrictions
in its By-Laws, to make distributions to its shareholders unless after giving
effect thereto (i) the corporation would not be able to pay its debts as they
become due in the usual course of business or (ii) the total assets of the
corporation would be less than the sum of its total liabilities plus the amount
that would be needed, if the corporation were to be dissolved at the time as of
which the distribution is measured, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
 
     Under Ohio law, directors may declare dividends or distributions provided
such dividends or distribution do not exceed the combination of the surplus of
the corporation and the difference between (i) the reduction in surplus that
results from the immediate recognition of the transition obligation under
Statement of Financial Accounting Standards No. 106 ("SFAS No. 106") and (2) the
aggregate amount of the transition obligation that would have been recognized as
of the date of the declaration of a dividend or distribution if the corporation
has elected to amortize its recognition of the transition obligation under SFAS
No. 106. Under Ohio law and the Bancshares Articles, no dividend or distribution
shall be paid to holders of shares of any class in violation of the rights of
holders of shares of any other class. Dividends shall not be declared when the
corporation is insolvent or when there is reasonable ground to believe that by
such payment the corporation would be rendered insolvent. If any portion of a
dividend or distribution is paid out of capital surplus, the corporation shall
notify the shareholders receiving the dividend or distribution shall notify the
shareholders of such.
 
ANTI-TAKEOVER STATUTES
 
     As discussed, Ohio has Control Share Acquisition Provisions. The Bancshares
Articles provide that such statute does not apply to Bancshares and that Article
SIXTH of the Bancshares Articles governs in its place. See "DESCRIPTION OF
BANCSHARES CAPITAL STOCK -- Description of Control Share Acquisition
Provisions."
 
     Pennsylvania has "anti-takeover" statutes which are designed to encourage
potential acquirors of publicly traded corporations such as Century to obtain
the consent and approval of the proposed target's board of directors prior to
commencing a tender offer for, or otherwise acquiring a significant amount of,
the target company's shares. This encouragement is accomplished by prohibiting
or restricting acquirors from undertaking many post-acquisition financial
restructuring alternatives.
 
     Century is governed by a set of interrelated provisions of the Pennsylvania
law that are designed to support the validity of actions taken by the Board of
Directors in response to takeover bids, including specifically the Board of
Directors' authority to "accept, reject or take no action" with respect to a
takeover bid, and permitting the unfavorable disparate treatment of a takeover
bidder. The Century Articles contain provisions reinforcing and expanding these
provisions in certain ways. These provisions may have the effect of making more
difficult and thereby discouraging attempts to acquire control of Century in a
transaction that the Board of Directors determines not to be in the best
interests of Century.
 
     Pennsylvania law requires that mergers with or sales of assets to an
interested shareholder (which includes a shareholder who is a party to the
proposed transaction) be approved by a majority of voting shares outstanding
other than those held by the interested shareholder, unless the transaction has
been approved by a majority of the corporation's directors who are not
affiliated with the interested shareholder or the transaction results in the
payment to all other shareholders of an amount not less than the highest amount
paid for shares by the interested shareholder. In addition, Pennsylvania law
prohibits, subject to certain exceptions, a "business combination" (defined to
include certain mergers, sales of assets, sales of five percent (5%) or more of
outstanding stock, loans, recapitalizations or liquidations or dissolutions)
between a registered corporation, such as Century, with a shareholder or group
of shareholders beneficially owning more than twenty percent (20%) of the voting
power such registered corporation (excluding certain shares) for a five-year
period following the date on which the holder became an interested shareholder.
                                      -43-
<PAGE>   58
 
                        PRO FORMA FINANCIAL INFORMATION
 
CITIZENS BANCSHARES, INC. AND CENTURY
 
     The following unaudited pro forma condensed consolidated balance sheet as
of December 31, 1997 and the unaudited pro forma condensed consolidated
statements of income for the years ended December 31, 1997, 1996 and 1995 have
been prepared to reflect Bancshares' acquisition of Century as if the Merger had
occurred on December 31, 1997 with respect to the balance sheet and as of
January 1, 1995 with respect to the income statements. No pro forma adjustments
were considered necessary. The actual adjustments to the accounts of Bancshares
will be made based on the underlying historical financial data at the time of
the transaction. Bancshares' management believes that the estimates used in
these pro forma financial statements are reasonable under the circumstances.
 
     The pro forma condensed consolidated financial information has been
prepared based on the "pooling of interests" method of accounting assuming
2,164,205 Bancshares Common Shares will be issued in the Merger and that no
Century shareholders will dissent with respect to the Merger. This information
will vary if any Century shareholders dissent of if the Conversion Ratio is
subject to adjustment as provided in the Merger Agreement. See "PROPOSED
MERGER -- Consideration for Century Common Shares." For a discussion of the
pooling of interests method of accounting, see "PROPOSED Merger -- Accounting
Treatment" and "Other Provisions of the Merger Agreement."
 
     The Merger Agreement calls for each Century shareholder to receive 0.425
Bancshares Common Shares for each Century Common Share, subject to adjustment
based on the value of Bancshares Common Shares prior to the consummation of the
Merger as defined in the Merger Agreement. If the merger were consummated on
February 28, 1998, the Conversion Ratio would be 0.4015, based on the Average
NMS Closing Price at that time. The pro forma condensed combined financial
statements have been prepared using a conversion ratio of 0.425. Pro forma basic
and diluted earnings per share ("EPS") using a conversion ratio of 0.425 and
various other conversion ratios, including those enumerated in the Merger
Agreement, are as follows:
 
<TABLE>
<CAPTION>
                                             1997                  1996                  1995
                                       ----------------      ----------------      ----------------
              EXCHANGE                 BASIC    DILUTED      BASIC    DILUTED      BASIC    DILUTED
                RATIO                   EPS       EPS         EPS       EPS         EPS       EPS
              --------                 -----    -------      -----    -------      -----    -------
<S>                                    <C>      <C>          <C>      <C>          <C>      <C>
0.4424...............................  $2.58     $2.56       $2.41     $2.40       $2.07     $2.07
0.4250...............................   2.61      2.59        2.44      2.43        2.09      2.09
0.4015...............................   2.65      2.63        2.48      2.47        2.12      2.12
0.3976...............................   2.66      2.64        2.48      2.47        2.13      2.13
</TABLE>
 
     The unaudited pro forma condensed consolidated balance sheets are not
necessarily indicative of the combined financial position had the Merger been
effective at those dates. The unaudited pro forma condensed consolidated
statements of income are not necessarily indicative of the results of operations
that would have occurred had the Merger been effective at the beginning of the
periods indicated, or of the future results of operations of Bancshares. These
pro forma financial statements should be read in conjunction with the historical
financial statements and the related notes incorporated elsewhere in this Joint
Proxy Statement/Prospectus.
 
     No adjustments to the pro forma financial statements were necessary to
conform to accounting methods as contemplated by Accounting Principles Board
Opinion No. 16.
 
                                      -44-
<PAGE>   59
 
                           CITIZENS BANCSHARES, INC.
 
                 PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
 
                               DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                             PRO FORMA
                                                            BANCSHARES        CENTURY        COMBINED
                                                           -------------   -------------   -------------
                                                           (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                            (UNAUDITED)
<S>                                                        <C>             <C>             <C>
ASSETS
Cash and due from banks.................................    $   31,787      $   12,439      $   44,226
Federal funds sold and interest-bearing deposits........           593          12,880          13,473
Securities held to maturity.............................        57,398              --          57,398
Securities available for sale...........................       331,729          67,647         399,376
Loans, net..............................................       640,103         349,204         989,307
Premises and equipment..................................        15,953          11,562          27,515
Accrued interest receivable and other assets............        39,915           4,800          44,715
                                                            ----------      ----------      ----------
  Total assets..........................................    $1,117,478      $  458,532      $1,576,010
                                                            ==========      ==========      ==========
LIABILITIES
Deposits................................................    $  795,178      $  392,926      $1,188,104
Federal funds purchased and repurchase agreements.......        74,664           4,000          78,664
Federal Home Loan Bank advances.........................       136,765          20,000         156,765
Accrued interest payable and other liabilities..........         7,594           4,898          12,492
                                                            ----------      ----------      ----------
  Total liabilities.....................................     1,014,201         421,824       1,436,025
SHAREHOLDERS' EQUITY....................................       103,277          36,708         139,985
                                                            ----------      ----------      ----------
  Total liabilities and shareholders' equity............    $1,117,478      $  458,532      $1,576,010
                                                            ==========      ==========      ==========
</TABLE>
 
                                      -45-
<PAGE>   60
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                     PRO FORMA
                                                         BANCSHARES     CENTURY       COMBINED
                                                         ----------    ----------    ----------
                                                           (DOLLARS IN THOUSANDS, EXCEPT PER
                                                                SHARE DATA) (UNAUDITED)
<S>                                                      <C>           <C>           <C>
INTEREST INCOME
Loans, including fees..................................  $   59,495    $   29,617    $   89,112
Securities.............................................      22,251         4,497        26,748
Other..................................................         171           528           699
                                                         ----------    ----------    ----------
          Total interest income........................      81,917        34,642       116,559
INTEREST EXPENSE
Deposits...............................................      28,478        16,286        44,764
Federal funds and repurchase agreements................       5,625           399         6,024
Federal Home Loan Bank advances and other..............       5,189           561         5,750
                                                         ----------    ----------    ----------
          Total interest expense.......................      39,292        17,246        56,538
                                                         ----------    ----------    ----------
NET INTEREST INCOME....................................      42,625        17,396        60,021
PROVISION FOR LOAN LOSSES..............................       1,646         2,070         3,716
                                                         ----------    ----------    ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES....      40,979        15,326        56,305
OTHER INCOME...........................................       6,992         3,158        10,150
OTHER EXPENSES.........................................      23,260        13,394        36,654
                                                         ----------    ----------    ----------
INCOME BEFORE INCOME TAXES.............................      24,711         5,090        29,801
INCOME TAXES...........................................       7,955           868         8,823
                                                         ----------    ----------    ----------
NET INCOME.............................................  $   16,756    $    4,222    $   20,978
                                                         ==========    ==========    ==========
EARNINGS PER COMMON SHARE
  Basic................................................  $     2.85    $     0.83    $     2.61
                                                         ==========    ==========    ==========
  Diluted..............................................  $     2.84    $     0.82    $     2.59
                                                         ==========    ==========    ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic................................................   5,882,867     5,065,901     8,035,875
                                                         ==========    ==========    ==========
  Diluted..............................................   5,902,261     5,139,955     8,093,800
                                                         ==========    ==========    ==========
</TABLE>
 
                                      -46-
<PAGE>   61
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1996
 
<TABLE>
<CAPTION>
                                                                                     PRO FORMA
                                                         BANCSHARES     CENTURY       COMBINED
                                                         ----------    ----------    ----------
                                                           (DOLLARS IN THOUSANDS, EXCEPT PER
                                                                SHARE DATA) (UNAUDITED)
<S>                                                      <C>           <C>           <C>
INTEREST INCOME
Loans, including fees..................................  $   57,166    $   24,933    $   82,099
Securities.............................................      16,999         5,466        22,465
Other..................................................         391           165           556
                                                         ----------    ----------    ----------
          Total interest income........................      74,556        30,564       105,120
INTEREST EXPENSE
Deposits...............................................      26,810        13,054        39,864
Federal funds and repurchase agreements................       2,295           494         2,789
Federal Home Loan Bank advances and other..............       2,918           318         3,236
                                                         ----------    ----------    ----------
          Total interest expense.......................      32,023        13,866        45,889
                                                         ----------    ----------    ----------
NET INTEREST INCOME....................................      42,533        16,698        59,231
PROVISION FOR LOAN LOSSES..............................       1,614           625         2,239
                                                         ----------    ----------    ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES....      40,919        16,073        56,992
OTHER INCOME...........................................       4,826         2,716         7,542
OTHER EXPENSES.........................................      23,728        12,613        36,341
                                                         ----------    ----------    ----------
INCOME BEFORE INCOME TAXES.............................      22,017         6,176        28,193
INCOME TAXES...........................................       7,311         1,270         8,581
                                                         ----------    ----------    ----------
NET INCOME.............................................  $   14,706    $    4,906    $   19,612
                                                         ==========    ==========    ==========
EARNINGS PER COMMON SHARE
  Basic................................................  $     2.50    $     0.97    $     2.44
                                                         ==========    ==========    ==========
  Diluted..............................................  $     2.50    $     0.96    $     2.43
                                                         ==========    ==========    ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic................................................   5,884,548     5,054,070     8,032,528
                                                         ==========    ==========    ==========
  Diluted..............................................   5,894,034     5,090,899     8,067,251
                                                         ==========    ==========    ==========
</TABLE>
 
                                      -47-
<PAGE>   62
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
                                                                                     PRO FORMA
                                                           BANCSHARES    CENTURY      COMBINED
                                                           ----------   ----------   ----------
<S>                                                        <C>          <C>          <C>
                                                            (DOLLARS IN THOUSANDS, EXCEPT PER
                                                                       SHARE DATA)
 
<CAPTION>
                                                                       (UNAUDITED)
<S>                                                        <C>          <C>          <C>
INTEREST INCOME
Loans, including fees....................................  $   53,164   $   21,806   $   74,970
Securities...............................................      16,986        5,645       22,631
Other....................................................         674          234          908
                                                           ----------   ----------   ----------
  Total interest income..................................      70,824       27,685       98,509
INTEREST EXPENSE
Deposits.................................................      25,519       12,234       37,753
Federal funds and repurchase agreements..................       1,726          148        1,874
Federal Home Loan Bank advances and other................       3,939          243        4,182
                                                           ----------   ----------   ----------
  Total interest expense.................................      31,184       12,625       43,809
                                                           ----------   ----------   ----------
NET INTEREST INCOME......................................      39,640       15,060       54,700
PROVISION FOR LOAN LOSSES................................       2,024          240        2,264
                                                           ----------   ----------   ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES......      37,616       14,820       52,436
OTHER INCOME.............................................       4,493        2,574        7,067
OTHER EXPENSES...........................................      23,579       11,740       35,319
                                                           ----------   ----------   ----------
INCOME BEFORE INCOME TAXES...............................      18,530        5,654       24,184
INCOME TAXES.............................................       5,967        1,386        7,353
                                                           ----------   ----------   ----------
NET INCOME...............................................  $   12,563   $    4,268   $   16,831
                                                           ==========   ==========   ==========
EARNINGS PER COMMON SHARE
  Basic..................................................  $     2.13   $     0.84   $     2.09
                                                           ==========   ==========   ==========
  Diluted................................................  $     2.13   $     0.84   $     2.09
                                                           ==========   ==========   ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic..................................................   5,892,325    5,059,983    8,042,818
                                                           ==========   ==========   ==========
  Diluted................................................   5,894,810    5,070,242    8,058,253
                                                           ==========   ==========   ==========
</TABLE>
 
                                      -48-
<PAGE>   63
 
CITIZENS BANCSHARES, INC., UNIBANK AND CENTURY FINANCIAL CORPORATION
 
     On March 6, 1998, Bancshares and UniBank consummated an affiliation whereby
UniBank was merged with and into Citizens. The affiliation was effected by means
of a merger in which each outstanding share of UniBank common stock was
converted into 13.25 shares of Bancshares Common Shares in a tax free exchange
accounted for as a pooling of interests. While UniBank is not considered to be
"significant" pursuant to Rule 11-01(b) of Regulation S-X, the following pro
forma combined financial information (on pages 50 through 56 hereof) is
presented for purposes of providing shareholders of Bancshares and Century with
additional information concerning Bancshares' recent acquisition of UniBank.
 
     The following unaudited pro forma condensed consolidated balance sheet as
of December 31, 1997 and the unaudited pro forma condensed consolidated
statements of income for the years ended December 31, 1997, 1996 and 1995 have
been prepared to reflect UniBank's affiliation with Bancshares and the proposed
Merger with Century as if the acquisitions had occurred on December 31, 1997
with respect to the balance sheet and as of January 1, 1995 with respect to the
income statements, in each case giving effect to the pro forma adjustments
described in the accompanying note. The pro forma adjustments are based on
estimates made for the purpose of preparing these pro forma financial
statements. The actual adjustments to the accounts of Bancshares will be made
based on the underlying historical financial data at the time of the
transactions. Bancshares' management believes that the estimates used in these
pro forma financial statements are reasonable under the circumstances.
 
     The pro forma condensed consolidated financial information has been
prepared based on the "pooling of interests" method of accounting. In the
UniBank transaction, 945,056 Bancshares Common Shares were issued. For a
discussion of the pooling of interests method of accounting, see "PROPOSED
Merger--Accounting Treatment" and "Other Provisions of the Merger Agreement." It
has been assumed that, in the Century transaction, the Conversion Ratio is 0.425
and 2,164,205 Bancshares Common Shares will be issued and that no Century
shareholders will dissent. This information will vary if any Century
shareholders dissent or if the Average NMS Closing Price (as defined in the
Merger Agreement between Bancshares and Century) is greater than $67.50 or less
than $56.50.
 
     The unaudited pro forma condensed consolidated balance sheet as of December
31, 1997 is not necessarily indicative of the combined financial position had
the acquisitions been effective at that date. The unaudited pro forma condensed
consolidated statements of income are not necessarily indicative of the results
of operations that would have occurred had the acquisitions been effective at
the beginning of the periods indicated, or of the future results of operations
of Bancshares. These pro forma financial statements should be read in
conjunction with the historical financial statements and the related notes
incorporated elsewhere in this Joint Proxy Statement/Prospectus.
 
     No additional adjustments to the pro forma financial statements were
necessary to conform to accounting methods as contemplated by Accounting
Principles Board Opinion No. 16.
 
                                      -49-
<PAGE>   64
 
                           CITIZENS BANCSHARES, INC.
 
                 PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
 
                               DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                                      BANCSHARES
                                                                              BANCSHARES               CENTURY
                                                                                 AND                     AND
                                                                               UNIBANK                 UNIBANK
                                                                 PRO FORMA    PRO FORMA               PRO FORMA
                                        BANCSHARES   UNIBANK    ADJUSTMENTS    COMBINED    CENTURY     COMBINED
                                        ----------   --------   -----------   ----------   --------   ----------
                                                     (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                      (UNAUDITED)
<S>                                     <C>          <C>        <C>           <C>          <C>        <C>
ASSETS
Cash and due from banks...............  $   31,787   $  9,817                 $   41,604   $ 12,439   $   54,043
Federal funds sold and
  interest-bearing deposits...........         593     13,148                     13,741     12,880       26,621
Securities held to maturity...........      57,398         --                     57,398         --       57,398
Securities available for sale.........     331,729     63,866     $(1,127)A      394,468     67,647      462,115
Loans, net............................     640,103    120,263                    760,366    349,204    1,109,570
Premises and equipment................      15,953      3,279                     19,232     11,562       30,794
Accrued interest receivable
  and other assets....................      39,915      5,767                     45,682      4,800       50,482
                                        ----------   --------     -------     ----------   --------   ----------
    Total assets......................  $1,117,478   $216,140     $(1,127)    $1,332,491   $458,532   $1,791,023
                                        ==========   ========     =======     ==========   ========   ==========
LIABILITIES
Deposits..............................  $  795,178   $192,209                 $  987,387   $392,926   $1,380,313
Federal funds purchased and repurchase
  agreements..........................      74,664      4,524                     79,188      4,000       83,188
Federal Home Loan Bank advances.......     136,765         --                    136,765     20,000      156,765
Accrued interest payable and
  other liabilities...................       7,594      1,598                      9,192      4,898       14,090
                                        ----------   --------     -------     ----------   --------   ----------
    Total liabilities.................   1,014,201    198,331          --      1,212,532    421,824    1,634,356
SHAREHOLDERS' EQUITY..................     103,277     17,809      (1,127)A      119,959     36,708      156,667
                                        ----------   --------     -------     ----------   --------   ----------
    Total liabilities and
      shareholders' equity............  $1,117,478   $216,140     $(1,127)    $1,332,491   $458,532   $1,791,023
                                        ==========   ========     =======     ==========   ========   ==========
</TABLE>
 
- ---------------
 
A -- To reflect a reduction of shareholders' equity for 3,675 UniBank common
     shares owned by Bancshares as of December 31, 1997.
 
                                      -50-
<PAGE>   65
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                                                          BANCSHARES
                                                                BANCSHARES                 UNIBANK
                                                                   AND                       AND
                                                                 UNIBANK                   CENTURY
                                                                PRO FORMA                 PRO FORMA
                                         BANCSHARES   UNIBANK    COMBINED     CENTURY      COMBINED
                                         ----------   -------   ----------   ----------   ----------
                                                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                 (UNAUDITED)
<S>                                      <C>          <C>       <C>          <C>          <C>
INTEREST INCOME
Loans, including fees..................  $   59,495   $10,076   $   69,571   $   29,617   $   99,188
Securities.............................      22,251     4,058       26,309        4,497       30,806
Other..................................         171       975        1,146          528        1,674
                                         ----------   -------   ----------   ----------   ----------
  Total interest income................      81,917    15,109       97,026       34,642      131,668
INTEREST EXPENSE
Deposits...............................      28,478     6,489       34,967       16,286       51,253
Federal funds and repurchase
  agreements...........................       5,625       182        5,807          399        6,206
Federal Home Loan Bank advances and
  other................................       5,189        --        5,189          561        5,750
                                         ----------   -------   ----------   ----------   ----------
  Total interest expense...............      39,292     6,671       45,963       17,246       63,209
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME....................      42,625     8,438       51,063       17,396       68,459
PROVISION FOR LOAN LOSSES..............       1,646       619        2,265        2,070        4,335
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME AFTER PROVISION FOR
  LOAN LOSSES..........................      40,979     7,819       48,798       15,326       64,124
OTHER INCOME...........................       6,992       841        7,833        3,158       10,991
OTHER EXPENSES.........................      23,260     6,575       29,835       13,394       43,229
                                         ----------   -------   ----------   ----------   ----------
INCOME BEFORE INCOME TAXES.............      24,711     2,085       26,796        5,090       31,886
INCOME TAXES...........................       7,955       643        8,598          868        9,466
                                         ----------   -------   ----------   ----------   ----------
NET INCOME.............................  $   16,756   $ 1,442   $   18,198   $    4,222   $   22,420
                                         ==========   =======   ==========   ==========   ==========
EARNINGS PER COMMON SHARE
  Basic................................  $     2.85   $ 19.23   $     2.67   $     0.83   $     2.50
                                         ==========   =======   ==========   ==========   ==========
  Diluted..............................  $     2.84   $ 19.23   $     2.66   $     0.82   $     2.48
                                         ==========   =======   ==========   ==========   ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic.............................   5,882,867    75,000    6,827,923    5,065,901    8,980,931
                                         ==========   =======   ==========   ==========   ==========
     Diluted...........................   5,902,261    75,000    6,847,317    5,139,955    9,038,856
                                         ==========   =======   ==========   ==========   ==========
</TABLE>
 
                                      -51-
<PAGE>   66
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1996
 
<TABLE>
<CAPTION>
                                                                                          BANCSHARES
                                                                BANCSHARES                 UNIBANK
                                                                   AND                       AND
                                                                 UNIBANK                   CENTURY
                                                                PRO FORMA                 PRO FORMA
                                         BANCSHARES   UNIBANK    COMBINED     CENTURY      COMBINED
                                         ----------   -------   ----------   ----------   ----------
                                                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                 (UNAUDITED)
<S>                                      <C>          <C>       <C>          <C>          <C>
INTEREST INCOME
Loans, including fees..................  $   57,166   $ 8,557   $   65,723   $   24,933   $   90,656
Securities.............................      16,999     2,847       19,846        5,466       25,312
Other..................................         391     1,458        1,849          165        2,014
                                         ----------   -------   ----------   ----------   ----------
  Total interest income................      74,556    12,862       87,418       30,564      117,982
INTEREST EXPENSE
Deposits...............................      26,810     5,294       32,104       13,054       45,158
Federal funds and repurchase
  agreements...........................       2,295       234        2,529          494        3,023
Federal Home Loan Bank advances and
  other................................       2,918        --        2,918          318        3,236
                                         ----------   -------   ----------   ----------   ----------
  Total interest expense...............      32,023     5,528       37,551       13,866       51,417
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME....................      42,533     7,334       49,867       16,698       66,565
PROVISION FOR LOAN LOSSES..............       1,614        40        1,654          625        2,279
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME AFTER PROVISION FOR
  LOAN LOSSES..........................      40,919     7,294       48,213       16,073       64,286
OTHER INCOME...........................       4,826     1,193        6,019        2,716        8,735
OTHER EXPENSES.........................      23,728     5,396       29,124       12,613       41,737
                                         ----------   -------   ----------   ----------   ----------
INCOME BEFORE INCOME TAXES.............      22,017     3,091       25,108        6,176       31,284
INCOME TAXES...........................       7,311       973        8,284        1,270        9,554
                                         ----------   -------   ----------   ----------   ----------
NET INCOME.............................  $   14,706   $ 2,118   $   16,824   $    4,906   $   21,730
                                         ==========   =======   ==========   ==========   ==========
EARNINGS PER COMMON SHARE
  Basic................................  $     2.50   $ 28.24   $     2.46   $     0.97   $     2.41
                                         ==========   =======   ==========   ==========   ==========
  Diluted..............................  $     2.50   $ 28.24   $     2.45   $     0.96   $     2.41
                                         ==========   =======   ==========   ==========   ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic.............................   5,884,548    75,000    6,851,030    5,054,070    8,999,010
                                         ==========   =======   ==========   ==========   ==========
     Diluted...........................   5,894,034    75,000    6,860,516    5,090,899    9,033,733
                                         ==========   =======   ==========   ==========   ==========
</TABLE>
 
                                      -52-
<PAGE>   67
 
                           CITIZENS BANCSHARES, INC.
 
               PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
 
                      FOR THE YEAR ENDED DECEMBER 31, 1995
 
<TABLE>
<CAPTION>
                                                                                          BANCSHARES
                                                                BANCSHARES                 UNIBANK
                                                                   AND                       AND
                                                                 UNIBANK                   CENTURY
                                                                PRO FORMA                 PRO FORMA
                                         BANCSHARES   UNIBANK    COMBINED     CENTURY      COMBINED
                                         ----------   -------   ----------   ----------   ----------
                                                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                 (UNAUDITED)
<S>                                      <C>          <C>       <C>          <C>          <C>
INTEREST INCOME
Loans, including fees..................  $   53,164   $ 8,157   $   61,321   $   21,806   $   83,127
Securities.............................      16,986     3,344       20,330        5,645       25,975
Other..................................         674       781        1,455          234        1,689
                                         ----------   -------   ----------   ----------   ----------
  Total interest income................      70,824    12,282       83,106       27,685      110,791
INTEREST EXPENSE
Deposits...............................      25,519     4,660       30,179       12,234       42,413
Federal funds and repurchase
  agreements...........................       1,726       154        1,880          148        2,028
Federal Home Loan Bank advances and
  other................................       3,939        --        3,939          243        4,182
                                         ----------   -------   ----------   ----------   ----------
  Total interest expense...............      31,184     4,814       35,998       12,625       48,623
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME....................      39,640     7,468       47,108       15,060       62,168
PROVISION FOR LOAN LOSSES..............       2,024       240        2,264          240        2,504
                                         ----------   -------   ----------   ----------   ----------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES............      37,616     7,228       44,844       14,820       59,664
OTHER INCOME...........................       4,493       464        4,957        2,574        7,531
OTHER EXPENSES.........................      23,579     4,853       28,432       11,740       40,172
                                         ----------   -------   ----------   ----------   ----------
INCOME BEFORE INCOME TAXES.............      18,530     2,839       21,369        5,654       27,023
INCOME TAXES...........................       5,967       876        6,843        1,386        8,229
                                         ----------   -------   ----------   ----------   ----------
NET INCOME.............................  $   12,563   $ 1,963   $   14,526   $    4,268   $   18,794
                                         ==========   =======   ==========   ==========   ==========
EARNINGS PER COMMON SHARE
  Basic................................  $     2.13   $ 26.18   $     2.11   $     0.84   $     2.08
                                         ==========   =======   ==========   ==========   ==========
  Diluted..............................  $     2.13   $ 26.18   $     2.11   $     0.84   $     2.08
                                         ==========   =======   ==========   ==========   ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic.............................   5,892,325    75,000    6,886,075    5,059,983    9,036,568
                                         ==========   =======   ==========   ==========   ==========
     Diluted...........................   5,894,810    75,000    6,888,560    5,070,242    9,052,003
                                         ==========   =======   ==========   ==========   ==========
</TABLE>
 
                                      -53-
<PAGE>   68
 
                           CITIZENS BANCSHARES, INC.
 
                   UNIBANK AND CENTURY FINANCIAL CORPORATION
 
               PRO FORMA COMBINED SELECTED FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                                        AS OF AND FOR THE
                                                                     YEAR ENDED DECEMBER 31,
                                                         -----------------------------------------------
                                                             1997             1996             1995
                                                         -------------    -------------    -------------
                                                          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                      <C>              <C>              <C>
OPERATING DATA:
Net interest income....................................   $   68,459       $   66,565       $   62,168
Provision for loan losses..............................        4,335            2,279            2,504
Net income.............................................       22,420           21,730           18,794
Cash dividends declared................................        9,462            7,503            5,472
PER SHARE DATA:
Net income -- basic....................................   $     2.50       $     2.41       $     2.08
Net income -- diluted..................................         2.48             2.41             2.08
Cash dividends.........................................         1.05             0.83             0.61
Book value at period end...............................        17.39            15.64            14.09
Weighted average shares outstanding -- basic...........    8,980,931        8,999,010        9,036,568
Weighted average shares outstanding -- diluted.........    9,038,856        9,033,733        9,052,003
BALANCE SHEET DATA (AT PERIOD END):
Total assets...........................................   $1,791,023       $1,544,156       $1,441,685
Net loans..............................................    1,109,570          986,825          912,158
Total deposits.........................................    1,380,313        1,232,344        1,179,399
Total shareholders' equity.............................      156,667          140,588          127,425
</TABLE>
 
                                      -54-
<PAGE>   69
 
                           CITIZENS BANCSHARES, INC.
 
                                    UNIBANK
 
                         CENTURY FINANCIAL CORPORATION
 
                           COMPARATIVE PER SHARE DATA
 
<TABLE>
<CAPTION>
                                                              AS OF AND FOR THE YEAR ENDED
                                                                      DECEMBER 31,
                                                              -----------------------------
                                                               1997       1996       1995
                                                              -------    -------    -------
<S>                                                           <C>        <C>        <C>
NET INCOME PER COMMON SHARE
HISTORICAL
Bancshares
  Basic.....................................................  $  2.85    $  2.50    $  2.13
  Diluted...................................................     2.84       2.50       2.13
Unibank
  Basic and diluted.........................................    19.23      28.24      26.18
Century
  Basic.....................................................     0.83       0.97       0.84
  Diluted...................................................     0.82       0.96       0.84
PRO FORMA COMBINED
  Basic.....................................................     2.50       2.41       2.08
  Diluted...................................................     2.48       2.41       2.08
EQUIVALENT AMOUNT OF CENTURY
  Basic.....................................................     1.06       1.02       0.88
  Diluted...................................................     1.05       1.02       0.88
DIVIDENDS PER COMMON SHARE
HISTORICAL
  Bancshares................................................  $  1.12    $  0.83    $  0.50
  UniBank...................................................     9.00       9.00       8.10
  Century...................................................     0.43       0.39       0.37
PER FORMA EQUIVALENT AMOUNT OF CENTURY                           0.48       0.35       0.21
BOOK VALUE PER COMMON SHARE
HISTORICAL
  Bancshares................................................  $ 17.51    $ 15.21    $ 13.58
  UniBank...................................................   237.45     224.53     207.63
  Century...................................................     7.21       6.75       6.27
PRO FORMA COMBINED..........................................    17.39      15.64      14.09
EQUIVALENT AMOUNT OF CENTURY................................     7.39       6.65       5.99
</TABLE>
 
                                      -55-
<PAGE>   70
 
                           CITIZENS BANCSHARES, INC.
 
                                    UNIBANK
 
                         CENTURY FINANCIAL CORPORATION
 
                          CONTRIBUTION BY THE PARTIES
 
                          AS OF AND FOR THE YEAR ENDED
                               DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                        BANCSHARES    UNIBANK    CENTURY    TOTAL
                                                        ----------    -------    -------    -----
<S>                                                     <C>           <C>        <C>        <C>
Net interest income...................................     62.3%       12.3%      25.4%     100.0%
Net income............................................     74.8         6.4       18.8      100.0
Total assets..........................................     62.4        12.0       25.6      100.0
Shareholders' equity..................................     65.9        10.7       23.4      100.0
Voting percentage after merger........................     65.5        10.5       24.0      100.0
</TABLE>
 
                                      -56-
<PAGE>   71
 
                     INFORMATION WITH RESPECT TO BANCSHARES
 
BUSINESS
 
     Bancshares is a bank holding company organized in 1982 under the laws of
the State of Ohio and registered with the Federal Reserve Board pursuant to the
Bank Holding Company Act of 1956, as amended, and engaged in the business of
commercial and retail banking. These activities account for substantially all of
Bancshares revenue, operating income and assets. Bancshares is a holding company
for two wholly owned subsidiary banks, a wholly owned reinsurance company and a
wholly owned courier company. The Citizens Banking Company ("Citizens"), owned
by Bancshares since 1982, was organized and chartered under the banking laws of
the State of Ohio in 1902. Citizens is an insured bank under the Federal Deposit
Insurance Act ("FDIA"). This subsidiary accounts for approximately 96% of
Bancshares' consolidated assets. The primary market area for Citizens is eastern
Ohio and consists of all of Columbiana County, all of Carroll County, portions
of Stark and Mahoning counties and the northern 75% of Jefferson County. A
secondary market is the southern portion of Jefferson County, the panhandle of
West Virginia north of Follansbee, and a smaller portion of Pennsylvania south
of Beaver and west of Darlington to the Ohio border. Citizens competes not only
with locally owned commercial banks and savings and loans, but also with larger
regional financial institutions in offering consumer and commercial financial
service products. First National Bank of Chester ("FNB"), owned by Bancshares
since January 1, 1990, was organized and chartered as a national banking
association under the laws of the United States on December 29, 1969 and
formally opened for business on January 2, 1970. FNB is insured under the FDIA
and accounts for approximately four percent of Bancshares' consolidated assets.
FNB's primary market area is Hancock County, West Virginia, with overlap in the
East Liverpool, Ohio market. FNB competes with locally owned commercial banks,
credit unions and savings and loan associations. Freedom Financial Life
Insurance Company ("Freedom Financial"), owned by Bancshares since August, 1985,
was organized and chartered under the laws of the State of Arizona in that same
year. Freedom Financial provides credit life and accident and health insurance
coverage to Citizens' and FNB's loan customers. Freedom Financial accounts for
less than one percent of Bancshares' consolidated assets. Freedom Express, Inc.
("Freedom Express"), owned by Bancshares since August 5, 1994, was organized and
chartered under the laws of the State of Ohio in 1984. Freedom Express
transports papers and documents between and among Ohio, Pennsylvania and West
Virginia. Freedom Express accounts for less than one percent of Bancshares'
consolidated assets. On August 1, 1997, Citizens acquired ValueNet, Inc., an
Internet access company. This is the first step in a plan to offer Internet
banking to all of Bancshares customers during 1998. As of December 31, 1997 and
December 31, 1996, Bancshares had total consolidated assets of approximately
$1.117 billion and $947.9 million and total shareholders' equity of $103.3
million and $89.7 million, respectively. Bancshares' principal executive offices
are located at 10 East Main Street, Salineville, Ohio 43945. The telephone
number of Bancshares' executive offices is (330) 679-2328.
 
YEAR 2000
 
     The Year 2000 issue deals with the fact that many computer applications, if
not corrected, could fail or create erroneous results by or at the year 2000
because many existing computer programs use only two digits to identify a year
in the date field and these programs were not designed or developed while
considering the impact of the upcoming change in the century. In order to assess
the Year 2000 issue, Bancshares has established a project group that represents
functional areas to be affected by Year 2000 changes. The Year 2000 project
group meets regularly to review Bancshares' progress. All data processing
systems have been identified and all major systems and most lesser systems have
been assessed for Year 2000 compliance. This assessment indicates that there
will be no material impact on Bancshares' operations or budgets to bring systems
into compliance by year end 1998. Most security and environmental systems have
also been assessed with no material impact indicated.
 
                                      -57-
<PAGE>   72
 
SUPPLEMENTARY FINANCIAL INFORMATION
 
     The following is a summary of consolidated quarterly financial data with
respect to Bancshares for the years 1996 and 1997.
 
                           CITIZENS BANCSHARES, INC.
 
                 QUARTERLY SELECTED FINANCIAL DATA (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                   QUARTER ENDED
                                               ------------------------------------------------------
                                               MARCH 31,    JUNE 30,    SEPTEMBER 30,    DECEMBER 31,
                                               ---------    --------    -------------    ------------
                                                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>          <C>         <C>              <C>
1997
Interest income..............................   $19,287     $20,643        $20,705         $21,282
Net interest income..........................    10,472      10,684         10,582          10,887
Provision for loan losses....................       418         407            407             414
Net income...................................     4,109       4,333          4,441           3,873
Earnings per share -- basic..................      0.70        0.74           0.75            0.66
Earnings per share -- diluted................      0.70        0.73           0.75            0.66
 
1996
Interest income..............................   $18,001     $18,778        $18,534         $19,243
Net interest income..........................    10,178      11,141         10,445          10,769
Provision for loan losses....................       387         469            388             370
Net income...................................     3,598       3,978          3,373           3,757
Earnings per share -- basic..................      0.61        0.68           0.57            0.64
Earnings per share -- diluted................      0.61        0.68           0.57            0.64
</TABLE>
 
                                      -58-
<PAGE>   73
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
 
     Bancshares' Management's Discussion and Analysis of Financial Condition as
of December 31, 1997 as compared to December 31, 1996 and Results of Operations
for the year ended December 31, 1997 as compared to the years ended December 31,
1996 and 1995, is included in Bancshares' 1997 Annual Report, which accompanies
this Joint Proxy Statement/Prospectus and is incorporated herein by reference.
 
  Recent Developments
 
     As discussed elsewhere in this Joint Proxy Statement/Prospectus on
September 12, 1997 Bancshares signed an agreement providing for UniBank of
Steubenville, Ohio, to be affiliated with Bancshares. UniBank has approximately
$216 million in assets, and operates 12 banking locations in Jefferson and
Columbiana Counties, which became branches of Citizens upon consummation of the
affiliation on March 6, 1998. See "PRO FORMA FINANCIAL INFORMATION -- Citizens
Bancshares, Inc., UniBank and Century Financial Corporation."
 
CERTAIN STATISTICAL INFORMATION WITH RESPECT TO BANCSHARES
 
     Certain statistical information with respect to Bancshares, such as
information pertaining to the distribution of assets, liabilities and equity,
interest rates and differentials; investment and loan portfolios; loan losses;
deposits; short term borrowings and returns on assets and equity can be found on
pages 2 through 27 of Bancshares' 1997 Annual Report and pages 6 through 16 of
its 1997 Form 10-K and is incorporated herein by reference.
 
MANAGEMENT
 
     All of the directors of Bancshares are also directors of Citizens. As noted
below, Messrs. Jonathan Levy and Lee Smith serve as directors of Citizens only.
In addition, some of the Bancshares directors, namely Messrs. Marty Adams and
James McBane, are directors of FNB. Except as otherwise noted, each person has
held his principal occupation or employment for at least five years.
 
  Directors of Bancshares
 
     Marty E. Adams (45).  Vice Chairman of the Board, President and Chief
Executive Officer of Bancshares and Citizens, Director since 1984; Director and
Chairman of the Board of FNB since 1990. Mr. Adams has been employed by Citizens
for 21 years in positions of increasing responsibility and as President and
Chief Executive Officer since 1987. (Term expires in 1998).
 
     Keith D. Burgett (55).  Director since 1988. Dr. Burgett is a veterinarian
and the owner of Carrollton Animal Hospital, Carrollton, Ohio. He is the owner
of Burgett Angus Farms, Carrollton, Ohio. Dr. Burgett is a member of the Ohio
State Veterinary Medical Licensing Board. (Term expires in 1998).
 
     Willard L. Davis (68).  Director since 1991. Mr. Davis is the President of
SPM Fleet Services, Inc. (an auto leasing company) in Wintersville, Ohio, Vice
President of State Park Motors, Inc. (an auto dealership) in Wintersville, Ohio,
and co-owner of Cardinal Motors, Inc. (an auto dealership) in Cadiz, Ohio. (Term
expires in 1998).
 
     Fred H. Johnson (81).  Director since 1965. Mr. Johnson served as Chairman
of the Board of Bancshares from 1984 through March 30, 1995 and Chairman of the
Board of Citizens from 1984 through 1994. Mr. Johnson is the retired former
owner of Summitville Tile and former President of Summitcrest, Inc. (Term
expires in 2000).
 
     Fred H. Johnson, III (36).  Corporate Secretary, Director since 1988. Mr.
Johnson is a director and President of Summitcrest, Inc. (a cattle farm) in
Summitville, Ohio. Mr. Johnson is the son of Fred H. Johnson. (Term expires
1999).
 
     Gerard P. Mastroianni (42).  Director since 1996. Mr. Mastroianni has been
a Citizens Director since 1993. Mr. Mastroianni is the President of the Buckeye
Village Market, Inc. (a grocery store chain), Alliance, Ohio, and President of
Alliance Ventures (a real estate holding company), Alliance, Ohio. (Term expires
in 2000).
                                      -59-
<PAGE>   74
 
     James C. McBane (58).  Chairman of the Boards of Bancshares and Citizens
since 1996; Director since 1964; Director of FNB since 1990. Principal and Chief
Executive Officer of McBane Insurance Agency, Inc., of Bergholz, Ohio. (Term
expires in 2000).
 
     Kenneth E. McConnell (61).  Director since 1973. Mr. McConnell owns and
operates McConnell's Farms and is a partner in McConnell's Farm Market (a meat
market), Richmond, Ohio. (Term expires in 1998).
 
     Elden L. Surbey (69).  Director since March, 1997. Mr. Surbey was formerly
a director and Chairman of the Board of The Navarre Deposit Bank Company until
its affiliation with Bancshares in October, 1996. Mr. Surbey is founder and
former owner of Surbey Feed & Supply Company. (Term expires in 2000).
 
     Glenn F. Thorne (69).  Director since March, 1994. Mr. Thorne was formerly
a director of The Firestone Bank from 1985 until its affiliation with Bancshares
in February, 1994. Mr. Thorne has been a Citizens Director since 1997. He is the
President and Chief Executive Officer of Thorne Management, Inc., which owns and
operates supermarkets in Ohio and Pennsylvania and a leasing company in Ohio;
Manager of Bias Realty, Ltd., which owns and operates a supermarket and
commercial rental properties in Ohio; and general partner of CPW Properties,
Ltd., which owns and operates commercial and residential properties in Ohio. Mr.
Thorne is also a Trustee of Mount Vernon Nazarene College. (Term expires in
1999).
 
  Directors of Citizens
 
     Jonathan A. Levy (37).  Director since April, 1996. Mr. Levy was formerly a
director of Western Reserve Bank of Ohio until its affiliation with Citizens in
1995. Mr. Levy is a partner of Redstone Investments, Youngstown, Ohio (a real
estate development, construction, and management company) and President of
Redstone Construction, Inc.
 
     Lee A. Smith (45).  Director since 1996. Mr. Smith is the President and
owner of Pleasant View Nursing Home in Lisbon, Ohio. He practiced law in Lisbon,
Ohio, from 1978 until 1996.
 
  Executive Officers
 
     In addition to Mr. Adams, Vice Chairman of the Board, President and Chief
Executive Officer, with respect to whom information is provided above in the
subsection pertaining to Directors, the following persons serve as executive
officers of Bancshares and/or one of its banking subsidiaries:
 
     Frank J. Koch (44).  Executive Vice President, Citizens, since 1988.
 
     Lawrence P. Crow (50).  Senior Vice President and Branch Administrator,
Citizens since 1987; previously Vice President, Citizens.
 
     Thomas G. Leek (49).  Senior Vice President of Bank Operations, Citizens,
since 1989.
 
     Patrick A. Sebastiano (40).  Senior Vice President and Trust Officer of FNB
since March, 1997; previously Senior Vice President and Senior Trust Officer at
Mahoning National Bank, Youngstown, Ohio, from 1989 to 1997.
 
     William L. White III (39).  Senior Vice President and Chief Financial
Officer, Citizens, since 1991.
 
     Jayson M. Zatta (37).  Senior Vice President and Manager, Commercial
Banking Department, Citizens, since 1993; Vice President and Manager, Commercial
Banking Department, Citizens, from 1989 to 1993.
 
     Certain information relating to the management, executive compensation,
various benefit plans (including stock plans), certain relationships and related
transactions and other related matters as to Bancshares is set forth in
Bancshares' Proxy Statement relating to the Bancshares 1998 Annual Meeting of
Shareholders, which is incorporated by reference in Bancshares' Annual Report on
Form 10-K for the year ended December 31, 1997. Bancshares' Annual Report on
Form 10-K for the year ended December 31, 1997 is incorporated by reference in
this Joint Proxy Statement/Prospectus. See "Information Incorporated by
Reference" below. Century shareholders who wish to obtain copies of these
documents may contact Bancshares at its address or telephone number set forth
under "AVAILABLE INFORMATION."
 
                                      -60-
<PAGE>   75
 
SECURITY OWNERSHIP OF MANAGEMENT
 
     The following table sets forth (i) as of March 2, 1998 and (ii) after
consummation of the Merger, the total number and percentage of Bancshares Common
Shares beneficially owned by each director of Bancshares and Citizens, each
executive officer named in the Summary Compensation Table and by all directors
and executive officers of Bancshares as a group. The number of Bancshares Common
Shares shown as being beneficially owned by each director are those over which
he has either sole or shared voting or investment power. As of March 2, 1998
there were 5,897,540 shares issued and outstanding and 2,250 shares held in
treasury. The percent of beneficial ownership of management after the Merger was
calculated assuming 13.25 Bancshares Common Shares for each UniBank common share
and a Conversion Ratio of 0.425 Bancshares Common Shares for each Century Common
Share, and assuming no dissenters' rights will be exercised by Century
shareholders. No executive officer or director owns more than five percent of
the outstanding Bancshares Common Shares.
 
<TABLE>
<CAPTION>
                                          AMOUNT AND NATURE OF      PERCENT OF CLASS AS OF    PERCENT OF CLASS
NAME OF BENEFICIAL OWNER                 BENEFICIAL OWNERSHIP(a)        MARCH 2, 1998           AFTER MERGER
- ------------------------                 -----------------------    ----------------------    ----------------
<S>                                      <C>                        <C>                       <C>
Marty E. Adams.........................          59,908(b)                   1.02                      *
Keith D. Burgett.......................          10,584(c)                      *                      *
Willard L. Davis.......................          52,899(d)                      *                      *
Fred H. Johnson........................          21,450                         *                      *
Fred H. Johnson, III...................          64,186(e)                   1.09                      *
Jonathan A. Levy**.....................           4,566                         *                      *
Gerard P. Mastroianni..................           6,376                         *                      *
James C. McBane........................          75,042(f)                   1.27                      *
Kenneth E. McConnell...................          44,092(g)                      *                      *
Lee A. Smith**.........................           7,662(h)                      *                      *
Elden L. Surbey........................           1,852                         *                      *
Glenn F. Thorne........................          56,775(i)                      *                      *
Frank J. Koch..........................           3,375(j)                      *                      *
William L. White, III..................           2,018(k)                      *                      *
All directors and executive officers as
  a group (18 persons).................         434,432                      7.37                   4.82
</TABLE>
 
- ---------------
 
 * Bancshares Common Shares owned represent less than 1% of class.
 
** Directors of Citizens only.
 
(a) Unless otherwise indicated, the person has sole voting and investment power
    as to the common shares held. Does not include common shares owned
    individually by spouses.
 
(b) Shared voting and investment power as to 31,787 of the 59,908 common shares.
    Includes 27,000 shares pursuant to stock option exercise which have not yet
    been issued by Bancshares. Also includes 1,121 common shares allocated to
    Mr. Adams in the Citizens Bancshares, Inc., Employee Stock Ownership Plan
    ("Bancshares ESOP").
 
(c) Shared voting and investment power. Includes 4,143 common shares held by
    children, as to which Dr. Burgett has power of attorney.
 
(d) Shared voting and investment power. Includes 2,811 shares held as co-trustee
    of a trust.
 
(e) Includes 63,186 common shares held in a trust as to which Mr. Johnson is the
    sole trustee and beneficiary.
 
(f) Includes 6,596 common shares held as custodian for minor child.
 
(g) Shared voting and investment power as to 4,498 of the 44,092 common shares.
 
(h) Shared voting and investment power as to 5,360 of the 7,662 common shares.
 
                                      -61-
<PAGE>   76
 
 (i) Includes 56,775 common shares held by Thorne Management, Inc., of which Mr.
     Thorne is President and Chief Executive Officer.
 
 (j) Shared voting and investment power as to 2,458 of the 3,375 common shares.
     Includes 917 common shares allocated to Mr. Koch in the Bancshares ESOP.
 
 (k) Includes 500 common shares allocated to Mr. White in the Bancshares ESOP.
 
 (l) Includes an aggregate of 3,675 common shares of the Bancshares ESOP
     allocated to executive officers.
 
MARKET PRICE OF BANCSHARES COMMON SHARES
 
     Bancshares Common Shares trade on the Nasdaq National Market under the
symbol "CICS." Six brokerage firms currently act as market makers for Bancshares
Common Shares: Parker/Hunter Incorporated, Advest, Inc., The Ohio Company,
McDonald & Company, Sandler O'Neill & Partners, L.P., and Herzog, Heine, Geduld
Inc. There is no assurance that such firms will continue to make a market in
Bancshares Common Shares.
 
     Information regarding the market price and dividends paid on Bancshares
Common Shares with respect to each quarterly period during 1996 and 1997 may be
found on page 29 of Bancshares' 1997 Annual Report. As of December 2, 1997, the
day immediately preceding the public announcement of the Merger Proposal, the
Nasdaq National Market closing price of Bancshares Common Shares was $62.50 and
Bancshares Common Shares were held by approximately 3,850 shareholders. As of
March 2, 1998, the Nasdaq National Market closing price of Bancshares Common
Shares was $71.75 and Bancshares Common Shares were held by approximately 3,895
shareholders.
 
INFORMATION INCORPORATED BY REFERENCE
 
     This Joint Proxy Statement/Prospectus is accompanied by a copy of
Bancshares' 1997 Annual Report. Certain of the information contained therein is
incorporated herein by reference. Furthermore, Bancshares filed with the
Commission an annual report on Form 10-K on February 26, 1998 and a current
report on Form 8-K on January 2, 1998. Certain of the information contained
therein is also incorporated herein by reference. Specifically, information
about Bancshares' industry segments may be found on page 2 of the Form 10-K;
selected financial information may be found on page 20 of the Annual Report;
management's discussion and analysis of Bancshares' financial condition and
results of operations for the year ended December 31, 1997 may be found on pages
21 through 27 of the Annual Report; and information regarding any changes in or
disagreements with accountants on accounting and financial disclosures, of which
there were none, may be found on page 25 of the Form 10-K.
 
                      INFORMATION WITH RESPECT TO CENTURY
 
BUSINESS
 
     Century is a Pennsylvania business corporation that was organized July 27,
1987, at the direction of CNB for the purpose of engaging in the business of a
bank holding company and of owning all of the common stock of CNB. Century is
engaged principally in commercial banking activities through its banking
subsidiary. CNB became a wholly-owned subsidiary of Century and the shareholders
of CNB became shareholders of Century on June 1, 1988. Century owns all of the
issued and outstanding common stock of CNB. In 1989, Century acquired the
Independent Bankers Computer Service ("IBCS"), a data processing center.
Effective April 1, 1995, IBCS was dissolved and its operations integrated with
CNB. IBCS was not a significant segment of Century's business.
 
     CNB, the wholly-owned banking subsidiary of Century, operates thirteen
banking offices. Twelve offices are located in Beaver County, CNB's primary
market area. One office is located in Butler County, which is adjacent to Beaver
County.
 
                                      -62-
<PAGE>   77
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
 
     Century's Management's Discussion and Analysis of Financial Condition as of
the year ended December 31, 1997 as compared to the year ended December 31, 1996
and Results of Operations for the year ended December 31, 1997 as compared to
the years ended December 31, 1996 and 1995, is included in Century's Annual
Report on Form 10-K, which is incorporated herein by reference.
 
DESCRIPTION OF DIRECTORS OF CENTURY WHO WILL SERVE AS DIRECTORS OF BANCSHARES
AFTER THE MERGER
 
Del E. Goedeker (56). Chairman of the Board. Since 1996, Mr. Goedeker has been
the Vice President -- Corporate Development of Tuscarora, Inc. In 1996, Mr.
Goedeker retired from the positions of President and Treasurer of
Vesuvius/McDanel and Chief Financial Officer/Vice President of The Americas
Vesuvius Companies Group, which positions he held for more than four years. Mr.
Goedeker has been a director of Century since 1982.
 
Joseph N. Tosh, II (55). President and Chief Executive Officer. For the past
five years, Mr. Tosh has been President and Chief Executive Officer of both
Century and CNB. Mr. Tosh has been a director of Century since 1986.
 
Charles I. Homan (53). Director. For the past five years Mr. Homan has been the
President and Chief Executive Officer of Michael Baker Corporation. He also
serves as a director of Michael Baker Corporation. Mr. Homan has been a director
of Century since 1995.
 
INFORMATION INCORPORATED BY REFERENCE
 
     Certain information relating to Century's management, executive
compensation, certain relationships and related transactions and other related
matters as to Century is set forth in Century's Annual Report on Form 10-K,
which is incorporated by reference into this Joint Proxy Statement/Prospectus.
 
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
 
     The following table sets forth information with respect to the beneficial
ownership of Century's Common Shares as of the close of business on February 3,
1998 by (i) the directors of Century, (ii) the Chief Executive Officer and Chief
Financial Officer and (iii) all directors and officers of Century as a group.
Unless otherwise indicated in the footnotes to the table, each person named and
all directors and officers as a group have sole voting power and sole investment
power with respect to the shares. All persons named in the table are directors
of Century except for Donald A. Benziger who is Senior Vice President, Chief
Financial Officer and Corporate Secretary. The percent of beneficial ownership
of management, giving effect to the merger, was calculated based upon: (1) a
conversion ratio of 0.425 of Bancshares Common Shares for all of Century Common
Shares, assumming no dissenters rights will be exercised and (2) the effect of
shares to be issued in relation to the affiliation of UniBank.
 
                                      -63-
<PAGE>   78
 
<TABLE>
<CAPTION>
                                                                        EFFECT OF MERGER
                                                                     -----------------------
                                           CORPORATION                CORPORATION
                                          COMMON SHARES     % OF     COMMON SHARES     % OF
                  NAME                        OWNED        CLASS         OWNED        CLASS
                  ----                    -------------    ------    -------------    ------
<S>                                       <C>              <C>       <C>              <C>
Elvin W. Batchelor(9)...................     58,354.0       1.10%       24,800.5       0.27%
Robert F. Garvin(2)(9)..................     16,436.0       0.31%        6,985.3       0.08%
Del E. Goedeker(8)(9)...................     61,771.0       1.17%       26,252.7       0.29%
A. Dean Heasley(1)(2)(9)................     66,766.0       1.26%       28,375.6       0.31%
Charles I. Homan(9).....................      5,478.8       0.01%        2,328.5       0.03%
Harry J. Johnston(1)(2)(3)(9)...........    216,757.0       4.09%       92,121.7       1.02%
Z. John Kruzic(9).......................     37,698.0       0.71%       16,021.7       0.18%
Wayne S. Luce(2)(9).....................    111,619.0       2.11%       47,438.1       0.52%
Sr. Mary Thaddeus Markelewicz(5)(9).....      3,316.0       0.60%        1,409.3       0.02%
Thomas K. Reed(2)(3)(4)(9)..............     53,590.4       1.01%       22,775.9       0.25%
Harold V. Shank(1)(9)...................     18,908.9       0.36%        8,036.3       0.09%
Joseph N. Tosh, II(1)(3)(8)(9)..........    231,850.0       4.37%       98,536.3       1.09%
Donald A. Benziger(2)(6)(9).............     23,396.2       0.44%        9,943.4       0.11%
                                            ---------      ------
All Directors and Officers as a Group
  (13 persons)..........................    905,941.3      17.78%      385,025.3       4.25%
                                            =========      ======      =========
</TABLE>
 
- ---------------
 
(1) In the case of A. Dean Heasley, Harry J. Johnston, Harold V. Shank, Jr.,
    Joseph N. Tosh II includes: 49,594; 160,601; 7,444.9; and 915 shares,
    respectively, held jointly with their wives, as to which voting power and
    investment power are shared.
 
(2) Includes shares held of record in the names of their spouse: Robert F.
    Garvin, Jr., 150 shares; A. Dean Heasley, 6,483 shares; Harry J. Johnston,
    7,257 shares; Wayne S. Luce, 43,200 shares; Thomas K. Reed, 864 shares; and
    Donald A. Benziger, 1,731.4 shares.
 
(3) Includes 37 shares held by Harry Johnston as trustee for his nephew; 20,500
    shares held by Thomas K. Reed as trustee for his mother; 51,067 shares held
    by Joseph Tosh II as trustee of his sister's trust.
 
(4) In the case of Thomas K. Reed, includes 1,152 and 1,182.8 shares held
    respectively by his son and daughter who continue to reside with Mr. Reed.
 
(5) In the case of Sister Mary Thaddeus Markelewicz, includes 1,500 shares held
    in the name of The Felician Sisters of Pennsylvania.
 
(6) In the case of Donald A. Benziger, includes 480.5 shares held by his spouse
    as custodian of their two children.
 
(7) In the case of Del E. Goedeker, includes 13,080 shares held in the Goedeker
    Foundation for which he has voting power.
 
(8) In the case of Joseph N. Tosh II, includes 110,000 shares held in JBT
    Investments, Limited Partnership for which he has voting power.
 
(9) In the case of Elvin Batchelor, Robert F. Garvin, Jr., Del Goedeker, A. Dean
    Heasley, Charles I. Homan, Harry Johnston, John Kruzic, Wayne Luce, Sister
    Mary Thaddeus Markelewicz, Thomas Reed, Harold Shank, Joseph Tosh II, Donald
    A. Benziger, includes 1,984; 94; 2,229; 1,968; 2,521; 3,076; 4,155; 5,485;
    1,066; 4,226; 1,418; 65,868; and 20,944 shares, respectively, covered by
    stock options granted and exercisable under the Century's stock option plan.
    In computing the percentage of ownership for each director and officer, the
    shares covered by the exercisable stock options held by such director and
    officer are deemed outstanding. In calculating the percentage of class
    owned, the total number of shares issued and outstanding have been increased
    to reflect the number of shares that would be outstanding if these options
    were exercised.
 
                                      -64-
<PAGE>   79
 
                                    EXPERTS
 
     The consolidated financial statements of Bancshares as of December 31, 1997
and 1996 and for the years ended December 31, 1997, 1996 and 1995, incorporated
by reference in this Joint Proxy Statement/Prospectus have been audited by
Crowe, Chizek and Company LLP, as set forth in its report thereon incorporated
by reference herein. The financial statements audited by Crowe, Chizek and
Company LLP have been incorporated by reference herein in reliance upon such
report given upon their authority as experts in accounting and auditing.
 
     The consolidated financial statements of Century as of December 31, 1997
and 1996 and for the years ended December 31, 1997, 1996 and 1995, attached as
Appendix F hereto and incorporated by reference in this Joint Proxy
Statement/Prospectus have been audited by S. R. Snodgrass, A. C., independent
auditors, as set forth in their report thereon and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
 
                                 LEGAL OPINIONS
 
     A legal opinion has been rendered by Squire, Sanders & Dempsey L.L.P. to
the effect that the issuance of the shares of Bancshares Common Shares offered
hereby has been duly authorized by Bancshares and that the Shares, when issued
in accordance with the Merger Agreement, will be duly issued and outstanding and
fully paid and non-assessable.
 
                                INDEMNIFICATION
 
     The Regulations of Bancshares provide that Bancshares will indemnify any
director or officer of Bancshares or any person who is or has served at the
request of Bancshares as a director, officer or trustee of another corporation,
joint venture, trust or other enterprise (and his heirs, executors and
administrators) against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement, actually or reasonably incurred because he or
she is or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative. This indemnification is to the full
extent and according to the procedures and requirements of the Ohio General
Corporation Law.
 
     In addition, Bancshares has entered into indemnification agreements with
each of its directors and executive officers which expand the indemnitees'
rights in the event that Ohio law and Bancshares' Regulations are further
changed. The indemnification rights available under the agreements are subject
to certain exclusions, including a provision that no indemnification shall be
made if a court determines by clear and convincing evidence that the indemnitee
has acted or failed to act with deliberate intent to cause injury to, or with
reckless disregard for the best interests of, Bancshares.
 
     Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers or persons controlling Bancshares pursuant
to the foregoing provisions, Bancshares has been informed that in the opinion of
the Commission such indemnification is against public policy as expressed in the
1933 Act and is therefore unenforceable.
 
                       PROPOSALS FOR 1998 ANNUAL MEETINGS
 
     The Bancshares 1998 Annual Meeting of Shareholders is scheduled to be held
on April [  ], 1998. Any proposals of shareholders of Bancshares intended to be
presented at that meeting must have been received by October 29, 1997, for
inclusion in Bancshares' proxy statement and form of proxy relating to the 1998
Annual Meeting of Shareholders.
 
     The date for the Century 1998 Annual Meeting of Shareholders has not yet
been scheduled pending the consideration by the Century shareholders of the
merger at the Century Special Meeting as described in this Joint Proxy
Statement/Prospectus. In the event that the Century 1998 Annual Meeting of
Shareholders is held, proposal of shareholders intended to be presented at that
meeting must have been received by November 26, 1997, for inclusion in Century's
proxy statement and form of proxy relating to the 1998 Annual Meeting of
Shareholders.
                                      -65-
<PAGE>   80
 
                                   APPENDIX A
 
                          AGREEMENT AND PLAN OF MERGER
 
                                       A-1
<PAGE>   81
 
                          AGREEMENT AND PLAN OF MERGER
 
     THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is entered into as of the
3rd day of December, 1997, by and between CITIZENS BANCSHARES, INC.
("Bancshares"), a corporation organized and existing under the laws of the State
of Ohio and registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended (the "BHCA"), and CENTURY FINANCIAL CORPORATION
("Century"), a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania and registered as a bank holding company under the
BHCA.
 
     NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto agree as follows:
 
                              PLAN OF AFFILIATION
 
     Pursuant to this Agreement, Bancshares and Century have agreed to a plan of
affiliation intended to result in a tax-free plan of reorganization pursuant to
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
Upon consummation of the transactions contemplated by this Agreement, at the
Effective Time (as hereinafter defined), Century will be merged with and into
Bancshares pursuant to the terms and conditions set forth herein (the "Merger").
Upon consummation of the Merger, the separate existence of Century shall cease
and Bancshares shall continue as the surviving corporation.
 
                                   ARTICLE I
 
                THE MERGER; STATUS AND CONVERSION OF SECURITIES;
                            EXCHANGE OF CERTIFICATES
 
     Section 1.1. Effective Time.  As soon as practicable after each of the
conditions set forth in Article VIII of this Agreement have been satisfied or
waived, Bancshares will file or cause to be filed a certificate of merger with
the Secretary of State of the State of Ohio and Century shall file or cause to
be filed articles of merger with the Department of State of the Commonwealth of
Pennsylvania, which shall in each case be in the form required by and executed
in accordance with applicable laws and regulations. The Merger shall become
effective at the time of the later of such filings (the "Effective Time").
 
     Section 1.2. Conversion of Century Common Shares into Bancshares Common
Shares.
 
     (a) At the Effective Time, each issued and outstanding share of Century
common stock, par value $.835 per share ("Century Common Shares"), other than
treasury shares and Century Common Shares as to which dissenters' rights have
been exercised (collectively, "Excluded Stock"), thereupon and without further
action shall be converted into .425 Bancshares common shares, without par value
("Bancshares Common Shares"), subject to adjustment as set forth below (the
"Conversion Ratio"):
 
          (i) If the Average NMS Closing Price (as defined below) is greater
     than $67.50, then each outstanding Century Common Share will be converted
     into that number of Bancshares Common Shares that results from dividing
     $28.70 by the Average NMS Closing Price; provided, however, that if prior
     to the effective time of the Merger, Bancshares publicly announces that it
     has agreed to a transaction in which control of Bancshares will be acquired
     by another company, then in no event will the conversion ratio be less than
     .3976; or
 
          (ii) If the Average NMS Closing Price is less than $56.50, but greater
     than or equal to $54.25, then each outstanding Century Common Share will be
     converted into that number of Bancshares Common Share that results from
     dividing $24.00 by the Average NMS Closing Price; or
 
          (iii) If the Average NMS Closing Price is less than $54.25, then each
     outstanding Century Common Share will be converted into .4424 Bancshares
     Common Shares.
 
     The term "NMS Closing Price" shall mean the price per share of the last
sale of Bancshares Common Shares reported on the Nasdaq National Market System
at the close of the trading day by the National Association of Securities
Dealers, Inc. The term "Average NMS Closing Price" shall mean the arithmetic
mean
 
                                       A-2
<PAGE>   82
 
of the NMS Closing Prices for the ten (10) trading days immediately preceding
the fifth (5th) trading day prior to the consummation of the Affiliation.
 
     (b) At the Effective Time, all rights with respect to Century Common Shares
pursuant to stock options ("Century Options") granted by Century under the
Century Financial Corporation Stock Option Plan, which are outstanding at the
Effective Time, whether or not then exercisable, shall be converted into and
become rights with respect to Bancshares Common Shares, and Bancshares shall
assume each Century Option in accordance with the terms of the stock option plan
under which it was issued and the stock option agreement by which it is
evidenced. From and after the Effective Time, (i) each Century Option assumed by
Bancshares may be exercised solely for Bancshares Common Shares; (ii) the number
of shares of Bancshares Common Shares subject to each Century Option shall be
equal to the number of Century Common Shares subject to such Century Option
immediately prior to the Effective Time multiplied by the Conversion Ratio and
(iii) the per share exercise price under each such Century Option shall be
adjusted by dividing the per share exercise price under each such option by the
Conversion Ratio and rounding to the nearest cent; provided, however, that the
terms of each Century Option shall, in accordance with its terms, be subject to
further adjustment as appropriate to reflect any stock split, stock dividend,
recapitalization or other similar transaction subsequent to the Effective Time.
It is intended that the foregoing assumption shall be undertaken in a manner
that will not constitute a "modification" as defined in Section 425 of the Code
as to any stock option which is an "incentive stock option."
 
     (c) No certificates or scrip representing fractional Bancshares Common
Shares shall be issued upon the surrender for exchange of Century certificates,
and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a shareholder of Bancshares. Notwithstanding any other
provision of this Agreement, each holder of Century Common Shares converted into
Bancshares Common Shares in the Merger who would otherwise be entitled to
receive a fraction of a Bancshares Common Share (after taking into account all
Century certificates delivered for exchange by such holder) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a Bancshares Common Share multiplied by the Average NMS Closing Price. Such
purchases of fractional interests are merely intended as a mechanism for
"rounding off" fractional shares and do not constitute separately bargained for
consideration in connection with the transactions contemplated by this
Agreement.
 
     (d) If after the date hereof and prior to the Effective Time, Bancshares or
Century shall declare a stock dividend or make distributions upon or subdivide,
split-up, reclassify, or combine its common stock or preferred stock or declare
a dividend or make a distribution of its common stock or preferred stock in any
security convertible into or exchangeable for its common stock or preferred
stock, then the Conversion Ratio shall be appropriately adjusted. Nothing
contained in this Section 1.2(d) shall be deemed to permit any action which is
otherwise prohibited by this Agreement.
 
     Section 1.3. Exchange of Certificates.  After the Effective Time, each
holder of an outstanding certificate or certificates for Century Common Shares
converted to Bancshares Common Shares shall be entitled to receive a certificate
or certificates representing the number of whole Bancshares Common Shares into
which such holder's Century Common Shares shall have been converted and, if
applicable, a cash payment in lieu of any fractional share determined in
accordance with this Agreement. In order to effect such surrender and exchange,
each such holder of Century Common Shares shall surrender the outstanding
certificate(s) therefor to Bancshares' designated exchange agent (the "Exchange
Agent"). As soon as reasonably practicable after the Effective Time, Bancshares
shall mail, or cause to be mailed, to each holder of record of Century Common
Shares (i) notice that the Merger has been consummated and instructions for
effecting the surrender of their Century certificates in exchange for
certificates representing Bancshares common shares and (ii) a letter of
transmittal which may be used to surrender Century certificates to the Exchange
Agent. Upon surrender of a Century certificate(s) for cancellation to the
Exchange Agent, together with a properly completed and duly executed letter of
transmittal and such other documents as may reasonably be requested, the holder
of such Century certificate shall be entitled to receive, and the Exchange Agent
shall promptly deliver as soon as reasonably practicable, in exchange therefor a
certificate representing that number of whole of Bancshares Common Shares which
such holder has the right to receive in respect of the Century certificate(s)
surrendered pursuant hereto (after taking into account all Century Common Shares
then held by such holder), and the Century certificate(s) so surrendered shall
forthwith be canceled. In the event of a lost certificate, the Century
shareholder shall provide, in lieu of the lost certificate, (i) a
                                       A-3
<PAGE>   83
 
request for a replacement certificate(s); (ii) an indemnity agreement and (iii)
other reasonable items (including an affidavit and a surety bond) requested by
Century in accordance with Article VI, Section 6.02 of Century's By-Laws.
Pending such surrender and exchange, such holder's certificate(s) for Century
Common Shares shall be deemed, for all corporate purposes (other than as set
forth in Section 1.4 of this Agreement), to evidence the number of whole
Bancshares Common Shares into which such Century Common Shares shall have been
converted pursuant to the Merger. The Exchange Agent shall, upon receipt of the
duly endorsed Century certificate or certificate with a duly endorsed separate
assignment, issue the Bancshares' Common Shares certificate to the surrendering
Century certificate holder, together with any cash payment in lieu of fractional
shares, as applicable. In the event of a transfer of ownership of Century Common
Shares that are not registered in the transfer records of Century, a certificate
representing the proper number of Bancshares Common Shares may be issued to a
transferee if the Century certificate representing such Century Common Shares is
presented to the Exchange Agent, accompanied by all documents required by
Bancshares to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid.
 
     Section 1.4. Payment of Dividends.  Unless and until any such outstanding
certificate(s) for Century Common Shares shall be so surrendered, no dividend
(cash or stock) payable to holders of record of Bancshares Common Shares as of
any date subsequent to the Effective Time shall be paid to the holder of such
outstanding certificate(s). Upon the surrender of the Century Common Share
certificate(s), Bancshares shall pay to the record holder of Bancshares Common
Shares issued in exchange therefor, the amount of dividends, if any, but without
interest, that have theretofore become payable to such record holder.
 
     Section 1.5. Effects of the Merger.  At the Effective Time:
 
          (a) Century shall be merged with and into Bancshares and the separate
     existence of Century shall cease and Bancshares shall be the "Surviving
     Corporation";
 
          (b) the Articles of Incorporation of Bancshares as in effect
     immediately prior to the Effective Time shall be the Articles of
     Incorporation of the Surviving Corporation;
 
          (c) the Regulations of Bancshares as in effect immediately prior to
     the Effective Time (as amended as provided for in subsection (iv) below and
     to reflect such other amendments thereto as may be contemplated by this
     Agreement) shall be the Regulations of the Surviving Corporation; and
 
          (d) the maximum allowable number of directors of the Surviving
     Corporation, as specified in the Regulations of the Surviving Corporation,
     shall be changed so as to permit the election of those persons listed in
     Section 4.9 hereof at the Effective Time.
 
          (e) At and after the Effective Time, the Merger will have the effects
     set forth in Section 1701.82 of the Ohio Revised Code and Section 1929 of
     the Pennsylvania Business Corporation Law of 1988, as amended, including
     that the Surviving Corporation will be responsible for all obligations of
     Century.
 
                                   ARTICLE II
 
                  REPRESENTATIONS AND WARRANTIES BY BANCSHARES
 
     Bancshares hereby represents and warrants to Century that, with respect to
Bancshares and The Citizens Banking Company, as applicable, except to the extent
set forth in the Disclosure Schedules delivered to Century at the signing of
this Agreement, which are attached hereto and made a part hereof, the following
are true and correct on the date of this Agreement and shall be true and correct
on the Closing Date (as hereinafter defined):
 
     Section 2.1. Due Organization and Good Standing.  Bancshares is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio and is registered as a bank holding company under the
BHCA and has full corporate authority and power to carry on its business as it
is now being conducted. The Citizens Banking Company ("Citizens") is a
corporation duly organized, validly existing, and in good standing as a state
banking association under the banking laws of the State of Ohio and is duly
authorized to conduct the banking business in which it is engaged.
 
                                       A-4
<PAGE>   84
 
     Section 2.2. Authority for Transaction.  The execution and performance of
this Agreement by Bancshares and its delivery to Century have been duly
authorized by all requisite corporate action, other than approval by Bancshares'
shareholders. This Agreement is valid and binding upon Bancshares and
enforceable against Bancshares in accordance with its terms.
 
     Section 2.3. Bancshares Common Shares to be Issued.  The Bancshares Common
Shares to be issued to Century shareholders pursuant to this Agreement, when so
issued, will have been duly authorized and validly issued by Bancshares and will
be fully paid and nonassessable.
 
     Section 2.4. Bancshares Common Shares Outstanding.
 
     (a) Stock.  The authorized capital stock of Bancshares consists of (i)
12,000,000 Bancshares Common Shares, without par value, of which, as of the date
of this Agreement 5,899,790 shares are issued and outstanding and 2,250 shares
are held in the treasury and (ii) 200,000 serial preferred shares, par value
$10.00 per share, none of which are issued and outstanding and none of which are
held in the treasury. Each outstanding Bancshares Common Share is duly
authorized, validly issued, fully paid and nonassessable.
 
     (b) Options and Other Securities.  Except as set forth in Schedule 2.4(b)
hereto, no options, warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any obligation into any shares
of Bancshares Common Shares have been authorized, granted or entered into by
Bancshares. Other than as set forth in Section 2.4(a), there are no Bancshares
debt or equity securities authorized or outstanding.
 
     Section 2.5. Books and Records.  The books of account, minute books, stock
record books, and other records of Bancshares, all of which have been made
available to Century, are complete and correct in all material respects and have
been maintained in accordance with sound business practices and the requirements
of Section 13(b)(2) of the Securities Exchange Act of 1934, as amended,
including the maintenance of an adequate system of internal controls. The minute
books of Bancshares contain accurate and complete records of all meetings held
of, and corporate action taken by, the shareholders, the Board of Directors, and
committees of the Board of Directors of Bancshares, and no meeting of any such
shareholders, Board of Directors, or committee has been held for which minutes
have not been prepared and are not contained in such minute books (except, as of
the date hereof, for the minutes of the Bancshares Board of Directors held on
November 19, 1997 to approve the execution and delivery of this Agreement, which
minutes have not yet been prepared).
 
     Section 2.6. Financial Statements; No Material Adverse Change.  Bancshares
has furnished to Century (a) consolidated balance sheets of Bancshares and its
subsidiaries as of December 31, 1995 and 1996, respectively, and consolidated
statements of income, consolidated statements of cash flows and consolidated
statements of changes in shareholders' equity for the years ended December 31,
1994, 1995 and 1996, respectively, all as certified by Crowe, Chizek and Company
LLP, Bancshares' independent auditors, and (b) unaudited consolidated balance
sheets and income statements of Bancshares and its subsidiaries for the periods
ended March 31, 1997, June 30, 1997 and September 30, 1997. The aforesaid
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and present fairly the
consolidated financial position of Bancshares as of the dates thereof and for
the periods covered thereby, except in the case of the interim financial
statements, normal year-end adjustments and the absence of notes thereto. Since
the date of the 1996 consolidated balance sheet (the "Bancshares Balance
Sheet"), there has not been any material adverse change in the financial
condition, results of operations, assets, or business of Bancshares and its
subsidiaries taken as a whole.
 
     2.7. Title to Properties; Encumbrances.  A complete and accurate list of
all real property, leaseholds, or other interests therein other than as a
mortgagee or secured party owned by Bancshares and Citizens has been made
available to Century. Bancshares and Citizens have made available to Century
copies of the deeds and other instruments (as recorded) by which Bancshares and
Citizens acquired such real property and interests, and copies of all title
insurance policies, opinions, abstracts, and surveys in the possession of
Bancshares and Citizens and relating to such property or interests. Bancshares
and Citizens, respectively, own (with good and marketable title in the case of
real property, subject only to the matters permitted by the following sentence)
all the properties and assets (whether real, personal, or mixed and whether
tangible or intangible) that they purport to own located in the facilities owned
or operated by Bancshares or Citizens or reflected as owned in the books and
records of
 
                                       A-5
<PAGE>   85
 
Bancshares, including all of the properties and assets reflected in the
Bancshares Balance Sheet (except for assets held under capitalized leases
disclosed or not required to be disclosed and personal property sold since the
Bancshares Balance Sheet, as the case may be, in the ordinary course of
business), and all of the properties and assets purchased or otherwise acquired
by Bancshares and Citizens since the Bancshares Balance Sheet. Each property and
asset reflected on the Bancshares Balance Sheet having a fair market value of at
least $100,000 is free and clear of all encumbrances and is not, in the case of
real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any nature except, with
respect to all such properties and assets, (a) mortgages or security interests
shown on the Bancshares Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets (such mortgages and security interests being limited to the property or
assets so acquired), with respect to which no default (or event that, with
notice or lapse of time or both, would constitute a default) exists, (c) liens
for current taxes not yet due, and (d) with respect to real property, (i) minor
imperfections of title, if any, none of which is substantial in amount,
materially detracts from the value or impairs the use of the property subject
thereto, or impairs the operations of Bancshares or Citizens, (ii) rights of
way, easements, building use restrictions, exceptions, variances, reservations
and limitations that are a matter of public record; and (iii) zoning laws and
other land use restrictions that do not impair the present or anticipated use of
the property subject thereto. All buildings owned by Bancshares and Citizens lie
wholly within the boundaries of the real property owned by Bancshares and do not
encroach upon the property of, or otherwise conflict with the property rights
of, any other third party.
 
     Section 2.8. Loans and Investments.  All loans and leases made or purchased
by Bancshares and its financial institution subsidiaries that are reflected on
the Bancshares Balance Sheet or on the accounting records of Bancshares as of
the Closing Date (collectively, the "Loans") represent or will represent valid
obligations arising from loans actually made or purchased by Bancshares and its
financial institution subsidiaries in the ordinary course of business and, to
Bancshares' Knowledge, no loan with a principal balance in excess of $50,000 is
subject to any defense or counterclaim. Unless paid prior to the Closing Date,
the Loans, on an aggregate basis, are collectible net of the aggregate reserves
shown on the Bancshares Balance Sheet of Bancshares as of its date and the
Closing Date, as applicable (which reserves are adequate and calculated in a
manner consistent with past practice.) There is no contest or claim under any
Loan relating to the amount or validity of such Loan which Loans are in the
aggregate material to the business or financial condition of Bancshares. Except
as set forth in Schedule 2.8, there are no loans of Bancshares and its financial
institution subsidiaries, the present principal balance of which is in excess of
$50,000, that have been classified orally or in writing by internal loan review
personnel as "Other Loans Specifically Mentioned," "Substandard," "Doubtful," or
"Loss," as of December 1, 1997. Except for pledges to secure public and trust
deposits, none of the investments reflected in the Bancshares Balance Sheet
under the heading "Investment Securities," and none of the investments made by
Bancshares since December 31, 1996, is subject to any restriction, whether
contractual or statutory, which impairs the ability of Bancshares and its
financial institution subsidiaries freely to dispose of such investment at any
time. Except as set forth on Schedule 2.8, Bancshares and its financial
institution subsidiaries are not parties to any repurchase agreement. Schedule
2.8 contains a list of all securities held by Bancshares, delineating whether
they are held in the "available for sale" category, "held to maturity" category
or in a trading account.
 
     Section 2.9. No Undisclosed Liabilities.  Except as set forth in Schedule
2.9, Bancshares and Citizens have no material liability or obligation of any
nature (whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Bancshares Balance Sheet and current liabilities incurred in the ordinary
course of business since the date thereof.
 
     Section 2.10. Absence of Conflicts.  To the best of Bancshares' Knowledge,
neither the execution, performance or delivery of this Agreement by Bancshares
nor the consummation of the transactions contemplated hereby will result in a
violation or breach of, or permit any third party to modify or rescind any term
or provision of, or constitute a default under, any indenture, mortgage, deed of
trust, promissory note or other contract, license or other agreement to which
Bancshares or Citizens is a party or to which any of its respective properties
is subject or will result in a breach of Bancshares' Articles of Incorporation
or Regulations, which violation, breach,
 
                                       A-6
<PAGE>   86
 
modification, rescission or default would reasonably be expected to have a
material adverse effect on Bancshares and its subsidiaries taken as a whole.
Except for the Board of Governors of the Federal Reserve System, and, if
applicable the FDIC and the office of the Comptroller of the Currency the
Securities and Exchange Commission, the Ohio Secretary of State, the Department
of State of the Commonwealth of Pennsylvania, the Pennsylvania Department of
Banking, the necessary state Blue Sky approvals (collectively the "Approvals")
and the approval of this Agreement and the Merger by Bancshares' shareholders,
Bancshares is not or will not be required to give any notice or to obtain any
consent from any third party in connection with the execution and delivery of
this Agreement or the consummation of the Merger.
 
     Section 2.11 Absence of Certain Changes and Events.  Except as set forth on
Schedule 2.11, since the date of the Bancshares Balance Sheet, Bancshares has
conducted its business only in the ordinary course of business and there has not
been any:
 
          (a) change in Bancshares' authorized or issued capital stock; grant of
     any stock option or right to purchase shares of capital stock of
     Bancshares; issuance of any security convertible into such capital stock;
     grant of any registration rights; purchase, redemption, retirement, or
     other acquisition by Bancshares of any shares of any such capital stock; or
     declaration or payment of any dividend or other distribution or payment in
     respect of shares of capital stock;
 
          (b) amendment to Bancshares' Articles of Incorporation or Regulations;
 
          (c) payment or increase by Bancshares or Citizens of any bonuses,
     salaries, or other compensation to any shareholder, director, or (except in
     the ordinary course of business) officer or employee or entry into any
     employment, severance, or similar contract with any director, officer, or
     employee;
 
          (d) adoption of, or increase in the payments to or benefits under, any
     profit sharing, bonus, deferred compensation, savings, insurance, pension,
     retirement, or other employee benefit plan for or with any employees of
     Bancshares or Citizens;
 
          (e) damage to or destruction or loss of any asset or property of
     Bancshares, whether or not covered by insurance involving a loss in excess
     of $25,000;
 
          (f) entry into, termination of, or receipt of notice of termination of
     (i) any license, distributorship, dealer, sales representative, joint
     venture, credit, or similar agreement, or (ii) any contract or transaction
     involving a total remaining commitment by or to Bancshares of at least
     $100,000;
 
          (g) sale, lease, or other disposition of any asset or property of
     Bancshares or mortgage, pledge, or imposition of any lien or other
     encumbrance on any material asset or property of Bancshares, other than in
     the ordinary course of business;
 
          (h) cancellation or waiver of any claims or rights with a value to
     Bancshares in excess of $100,000;
 
          (i) material change in the accounting methods used by Bancshares; or
     (j) agreement, whether oral or written, by Bancshares to do any of the
     foregoing.
 
     Section 2.12. Compliance with Laws; Licenses.  Except as set forth in
Schedule 2.12 hereof, Bancshares and Citizens are not engaged in or a party to,
(as a defendant), nor do they have any reasonable basis to anticipate, any legal
action, investigation, arbitration, or other proceeding before any court,
administrative agency, arbitrator or other forum, which either individually or
in the aggregate would have or could be reasonably expected to have a material
adverse effect on Bancshares and its subsidiaries taken as a whole. Bancshares
and Citizens have not been charged with nor to their Knowledge are they under
investigation with respect to, and Bancshares and Citizens have no basis to
anticipate any charge or investigation with respect to, any violation of any
provision of federal, state, or other applicable law or administrative
regulation (including, without limitation, the Bank Secrecy Act, the Community
Reinvestment Act and applicable consumer protection and disclosure laws, rules
and regulations) which may materially adversely affect the financial condition,
results of operations, assets, or business of Bancshares or Citizens. There is
no litigation, proceeding, or governmental investigation pending or to
Bancshares' Knowledge, threatened (or which Bancshares or Citizens has any
reasonable basis to anticipate) which relates to any of the transactions
contemplated by this Agreement. Bancshares and Citizens have responded
 
                                       A-7
<PAGE>   87
 
to and satisfied all exceptions, if any, arising out of any federal, state or
other regulatory examination. Bancshares and Citizens possess all material
licenses, franchises, permits and other governmental authorizations and all
material patents, trademarks, service marks, trade names, copyrights or rights
thereto necessary for the continued conduct of Bancshares' or Citizens' banking
business without material interference or interruption.
 
     Section 2.13. Brokerage and Finder's Fees.  Except for fees payable to its
financial advisor, Sandler O'Neill & Partners, L.P. ("Sandler O'Neill"),
Bancshares has not employed any broker, finder, or agent, or agreed to pay or
incurred any brokerage fee, finder's fee, commission or other similar form of
compensation in connection with this Agreement or the transactions contemplated
hereby.
 
     Section 2.14. Accounting Matters.  Neither Bancshares nor, to its best
Knowledge, any of its affiliates, has through the date of this Agreement taken
or agreed to take any action that would prevent Bancshares from accounting for
the business combination contemplated by this Agreement as a "pooling of
interests".
 
     Section 2.15. Compliance with Securities Laws.  To the best of its
Knowledge, Bancshares is in compliance with all federal and state securities
laws and regulations, including but not limited to all filing requirements,
except to the extent that additional filings will be required in connection with
the transactions contemplated by this Agreement. All information provided in
such filings is accurate and complete, in all material respects, to the extent
required by such laws and regulations.
 
     Section 2.16. Ownership of Century Common Shares.  Except for Bancshares'
right to acquire shares of Century common stock pursuant to that certain Stock
Option Agreement dated November 17, 1997, neither Bancshares, nor any of its
affiliates or associates beneficially owns, directly or indirectly, more than
4.9% of the outstanding Century Common Shares.
 
     Section 2.17. Insurance of Deposits.  The deposits of Citizens are insured
by the Federal Deposit Insurance Corporation in accordance with the Federal
Deposit Insurance Act ("FDIA"). Citizens has paid all assignments and filed all
reports required under the FDIA and is in compliance with all regulatory
requirements imposed in connection with the insurance of its deposits.
 
     Section 2.18. Authorization for this Agreement.  Other than as contemplated
in Articles VI and VII hereof, no authorization, approval or consent of any
governmental department, bureau or agency, or other public board or authority is
required for the consummation by Bancshares or Citizens of the transactions
contemplated by this Agreement.
 
     Section 2.19. Board Approval; Submission to Shareholders.  The Board of
Directors of Bancshares has unanimously approved this Agreement, and will direct
that this Agreement be submitted to a vote of Bancshares shareholders at either
its 1998 annual meeting or at a special meeting of the shareholders to be called
for that purpose, all in accordance with and as required by law and in
accordance with the Articles of Incorporation and Regulations of Bancshares.
 
     Section 2.20. Material Misstatements or Omissions.  No representation or
warranty by Bancshares or Citizens in this Agreement or any document, statement,
certificate, schedule or exhibit furnished or to be furnished to Bancshares by
or on behalf of Bancshares or Citizens pursuant hereto contains, or will when
furnished contain, any untrue statement of material fact, or omits or will then
omit to state, a material fact necessary to make the statement(s) of facts
contained therein (in light of the circumstances under which they were made),
not misleading.
 
                                  ARTICLE III
 
                   REPRESENTATIONS AND WARRANTIES BY CENTURY
 
     Century hereby represents and warrants to Bancshares that, with respect to
Century and Century National Bank Trust Company ("CNB"), as applicable, except
to the extent set forth in the Disclosure Schedules delivered
 
                                       A-8
<PAGE>   88
 
to Bancshares at the signing of this Agreement, which are attached hereto and
made a part hereof, the following are true and correct on the date of this
Agreement and shall be true and correct on the Closing Date:
 
     Section 3.1. Outstanding Securities of Century.
 
     (a) Stock.  The authorized capital stock of Century consists solely of
8,000,000 Century Common Shares, par value $.835 per share, of which 5,082,148
shares are issued and outstanding and 26,661 are held in the treasury as of the
date of this Agreement. Each outstanding Century Common Share is duly
authorized, validly issued, fully paid, and nonassessable.
 
     (b) Options and Other Securities.  Except as set forth on Schedule 3.1(b)
hereto, no options, warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any obligation into any shares
of Century Common Shares have been authorized, granted or entered into by
Century. Other than as set forth in Section 3.1(a), there are no Century debt or
equity securities authorized or outstanding. Except as set forth on Schedule
3.1(b), Century does not have, nor will it have at any time from the execution
of this Agreement through the time of Closing (as hereinafter defined), any
obligations or commitments related to the Common Shares that may require Century
to issue or change the number of its issued or authorized Common Shares.
 
     Section 3.2. Due Organization and Good Standing.  Century is a corporation
duly organized, validly existing, and in good standing under the laws of the
Commonwealth of Pennsylvania and is registered as a bank holding company under
the BHCA and has full corporate authority and power to carry on its business as
it is now being conducted. CNB is a national banking association duly organized,
validly existing, and in good standing under the banking laws of the United
States and is duly authorized to conduct the banking business in which it is
engaged.
 
     Section 3.3. Authority for Transaction.  The execution of this Agreement
and its delivery to Bancshares have been authorized by all requisite corporate
action, other than approval by Century shareholders. This Agreement is valid and
binding upon Century, and enforceable against Century in accordance with its
terms.
 
     Section 3.4. Books and Records.  The books of account, minute books, stock
record books, and other records of Century, all of which have been made
available to Bancshares, are complete and correct in all material respects and
have been maintained in accordance with sound business practices and the
requirements of Section 13(b)(2) of the Securities Exchange Act of 1934, as
amended, including the maintenance of an adequate system of internal controls.
The minute books of Century contain accurate and complete records of all
meetings held of, and corporate action taken by, the shareholders, the Board of
Directors, and committees of the Board of Directors of Century, and no meeting
of any such shareholders, Board of Directors, or committee has been held for
which minutes have not been prepared and are not contained in such minute books,
except for the minutes of the meeting of Century's Board of Directors held on
December 2, 1997 to approve this Agreement, which minutes have not yet been
prepared.
 
     Section 3.5. Absence of Conflicts.  To the best of Century's Knowledge,
except as set forth on Schedule 3.5 hereto, neither the execution, delivery or
performance of this Agreement by Century, nor the consummation of the
transactions contemplated hereby will result in a violation or breach of, or
permit any third party to modify or rescind any term or provision of, or
constitute a default under, any indenture, mortgage, deed of trust, promissory
note or other contract, license or other agreement to which Century or CNB is a
party or to which any of their properties are subject or will result in a breach
of Century's or CNB's Articles of Incorporation or By-Laws, which violation,
breach, modification, rescission or default would reasonably be expected to have
a material adverse effect on Century and its subsidiaries taken as a whole.
Except for the Approvals and the approval of this Agreement and the Merger by
the Century shareholders, Century and CNB are not or will not be required to
give any notice or to obtain any consent from any third party in connection with
the execution and delivery of this Agreement or the consummation of the Merger.
 
     Section 3.6. Financial Statements.  Century has delivered to Bancshares (a)
consolidated financial statements for each of the fiscal years ended December
31, 1993, 1994, 1995 and 1996, respectively, consisting of balance sheets and
the related statements of income and retained earnings and cash flows for the
fiscal years ended on such date, all as certified by S.R. Snodgrass A.C.,
Century's independent auditors, and (b) unaudited
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<PAGE>   89
 
consolidated financial statements for the interim periods ended March 31, 1997,
June 30, 1997 and September 30, 1997, consisting of balance sheets and the
related statements of income. The aforesaid financial statements, as of the
dates thereof and for the periods covered thereby, have been prepared in
conformity with generally accepted accounting principles, consistently applied
throughout the periods indicated, and fairly present the financial position of
Century as of the dates thereof and the results of operations and cash flows for
the periods indicated, except in the case of the interim financial statements,
normal year-end adjustments and the absence of notes thereto. Since the date of
the 1996 Consolidated Balance Sheet (the "Century Balance Sheet"), there has not
been any material adverse change in the financial condition, results of
operations, assets or business of Century and its subsidiaries taken as a whole.
 
     Section 3.7. Title to Properties; Encumbrances.  Century has previously
delivered a complete and accurate list, contained in the Information Memorandum
and Supplemental Appendices dated October, 1997 and prepared by Danielson
Associates, Inc. (the "Danielson Information Memorandum"), of all real property,
leaseholds, or other interests therein other than as a mortgagee or secured
party owned by Century and CNB. Century and CNB have made available to
Bancshares copies of the deeds and other instruments (as recorded) by which
Century and CNB acquired such real property and interests, and copies of all
title insurance policies, opinions, abstracts, and surveys in the possession of
Century and CNB and relating to such property or interests. Century and CNB
respectively own (with good and marketable title in the case of real property,
subject only to the matters permitted by the following sentence) all the
properties and assets (whether real, personal, or mixed and whether tangible or
intangible) that they purport to own located in the facilities owned or operated
by Century or CNB or reflected as owned in the books and records of Century or
CNB, including all of the properties and assets reflected in the Century Balance
Sheet (except for assets held under capitalized leases disclosed in the
Danielson Information Memorandum and personal property sold since the Century
Balance Sheet, as the case may be, in the ordinary course of business), and all
of the properties and assets purchased or otherwise acquired by Century and CNB
since the Century Balance Sheet. Each property and asset reflected on the
Century Balance Sheet having a fair market value of at least $50,000 is free and
clear of all encumbrances and is not, in the case of real property, subject to
any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except, with respect to all such
properties and assets, (a) mortgages or security interests shown on the Century
Balance Sheet as securing specified liabilities or obligations, with respect to
which no default (or event that, with notice or lapse of time or both, would
constitute a default) exists, (b) mortgages or security interests incurred in
connection with the purchase of property or assets (such mortgages and security
interests being limited to the property or assets so acquired), with respect to
which no default (or event that, with notice or lapse of time or both, would
constitute a default) exists, (c) liens for current taxes not yet due, and (d)
with respect to real property, (i) minor imperfections of title, if any, none of
which is substantial in amount, materially detracts from the value or impairs
the use of the property subject thereto, or impairs the operations of Century or
CNB, (ii) rights of way, easements, building use restrictions, exceptions,
variances, reservations and limitations that are a matter of public record, and
(iii) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto. All buildings owned by
Century and CNB lie wholly within the boundaries of the real property owned by
Century and CNB and do not encroach upon the property of, or otherwise conflict
with the property rights of, any other third party.
 
     Section 3.8. Contracts.
 
          (a) Schedule 3.8(a) contains a complete and accurate list, and Century
     has delivered to Bancshares true and complete copies, of:
 
             (i) each contract (other than Loans entered into by CNB in the
        ordinary course of business) that involves performance of services by
        Century or CNB of an amount or value in excess of $25,000;
 
             (ii) each contract (other than Loans entered into by CNB in the
        ordinary course of business) that involves performance of services or
        delivery of goods or materials to Century or CNB of an amount or value
        in excess of $25,000;
 
             (iii) each contract that was not entered into in the ordinary
        course of business and that involves expenditures or receipts of Century
        or CNB in excess of $25,000;
 
                                      A-10
<PAGE>   90
 
             (iv) each lease, rental or occupancy agreement, license,
        installment and conditional sale agreement, and other contract affecting
        the ownership of, leasing of, title to, use of, or any leasehold or
        other interest in, any real or personal property (except personal
        property leases and installment and conditional sales agreements having
        a value per item or aggregate payments of less than $25,000 and with
        terms of less than one year);
 
             (v) each joint venture, partnership, and other contract (however
        named) involving a sharing of profits, losses, costs, or liabilities by
        Century or CNB with any other person, third party or entity;
 
             (vi) each contract containing covenants that in any way purport to
        restrict the business activity of Century or CNB or any affiliate of
        Century or CNB or limit the freedom of Century or CNB or any affiliate
        of Century or CNB to engage in any line of business or to compete with
        any person, third party or entity;
 
             (vii) each power of attorney that is currently effective and
        outstanding;
 
             (viii) each contract entered into other than in the ordinary course
        of business that contains or provides for an express undertaking by
        Century or CNB to be responsible for consequential damages;
 
             (ix) each contract for capital expenditures in excess of $25,000;
 
             (x) each written warranty, guaranty, and/or other similar
        undertaking with respect to contractual performance extended by Century
        or CNB other than in the ordinary course of business; and
 
             (xi) each amendment, supplement, and modification (whether oral or
        written) in respect of any of the foregoing.
 
          (b) Except as set forth on 3.8(b), to Century's Knowledge, no officer,
     director, agent, employee, consultant, or contractor of Century or CNB is
     bound by any contract that purports to limit the ability of such officer,
     director, agent, employee, consultant, or contractor to engage in or
     continue any conduct, activity, or practice relating to the business of
     Century or CNB.
 
          (c) Except as set forth on Schedule 3.8(c), each contract identified
     or required to be identified on Schedule 3.8(a) is in full force and effect
     and is valid and enforceable in accordance with its terms.
 
          (d) Except with respect to Loans (as defined in Section 3.10) and
     leases in the ordinary course of business and except as set forth on
     Schedule 3.8(d):
 
             (i) Century and CNB are, and at all times since December 31, 1992
        have been, in full compliance with all applicable terms and requirements
        of each contract under which Century or CNB have or had any obligation
        or liability or by which Century or CNB or any of the assets owned or
        used by Century or CNB are or were bound and the breach of which would
        reasonably be expected to have a material adverse effect on Century and
        its subsidiaries taken as a whole;
 
             (ii) to Century's Knowledge, each other person, third party or
        entity that has or had any obligation or liability under any contract
        under which Century or CNB have or had any rights is, and at all times
        since December 31, 1992 has been, in full compliance with all applicable
        terms and requirements of such contract;
 
             (iii) to Century's Knowledge, no event has occurred or circumstance
        exists that (with or without notice or lapse of time) may contravene,
        conflict with, or result in a violation or breach of, or give Century or
        CNB or any other person, third party or entity the right to declare a
        default or exercise any remedy under, or to accelerate the maturity or
        performance of, or to cancel, terminate, or modify any contract; and
 
             (iv) Century and CNB have not given to or received from any other
        person, third party or entity, at any time since December 31, 1992, any
        notice or other communication (whether oral or written) regarding any
        actual, alleged, possible, or potential violation or breach of, or
        default under, any contract.
 
                                      A-11
<PAGE>   91
 
          (e) Except with respect to Loans and leases in the ordinary course of
     business, there are no renegotiations of, attempts to renegotiate, or
     outstanding rights to renegotiate any material amounts paid or payable to
     Century or CNB, as applicable, under current or completed contracts with
     any person, third party or entity and, to the Knowledge of Century or CNB,
     no such person, third party or entity has made written demand for such
     renegotiation.
 
          (f) The contracts relating to the provision of services by Century or
     CNB have been entered into in the ordinary course of business and have been
     entered into without the commission of any act alone or in concert with any
     other person, third party or entity, or any consideration having been paid
     or promised, that is or would be in violation of any applicable federal,
     state or local law, rule, regulation or statute.
 
     Section 3.9. Insurance of Deposits.  The deposits of CNB are insured by the
Federal Deposit Insurance Corporation in accordance with the FDIA. CNB has paid
all assessments and filed all reports required under the FDIA and is in
compliance with all regulatory requirements imposed in connection with the
insurance of its deposits.
 
     Section 3.10. Loans and Investments  All loans and leases made or purchased
by Century and CNB that are reflected on the Century Balance Sheet or on the
accounting records of Century as of the Closing Date (collectively, the "Loans")
represent or will represent valid obligations arising from loans actually made
or purchased by Century and CNB that are or will be collectible in the ordinary
course of business (net of the applicable reserve for loan and lease losses
described in this Section 3.10), and, to Century's Knowledge, except as set
forth on Schedule 3.10 hereto, no loan with a principal balance in excess of
$25,000 is subject to any defense or counterclaim. The reserve for possible loan
and lease losses shown on the consolidated statement of condition of Century and
its subsidiaries as of September 30, 1997 is, and the reserves for possible loan
and lease losses on the consolidated balance sheets of Century and its
subsidiaries as of quarter ends subsequent to the date of this Agreement will be
adequate in all material respects under the requirements of generally accepted
accounting principles to provide for losses relating to the loan and lease
portfolios of Century and its subsidiaries, net of recoveries relating to loans
previously charged off, as of the respective dates of such balance sheets. There
is no contest or claim under any Loan relating to the amount or validity of such
Loan which Loans are in the aggregate material to the business or financial
condition of Century and CNB. Except as set forth in Schedule 3.10, there are no
loans of Century and CNB, the present principal balance of which is in excess of
$25,000, that have been classified orally or in writing by internal loan review
personnel as "Other Loans Specifically Mentioned," "Substandard," "Doubtful," or
"Loss," as of September 30, 1997. Except for pledges to secure public and trust
deposits, none of the investments reflected in the Century Balance Sheet under
the heading "Investment Securities," and none of the investments made by Century
and CNB since December 31, 1996, is subject to any restriction, whether
contractual or statutory, which impairs the ability of Century and CNB freely to
dispose of such investment at any time. Except as set forth on Schedule 3.10,
Century and CNB are not parties to any repurchase agreement. Schedule 3.10
contains a list of all securities held by Century and CNB as of October 31, 1997
(to be updated at Closing), delineating whether they are held in the "available
for sale" category, "held to maturity" category or in a trading account.
 
     Section 3.11. Insurance Policies.  All premiums due on all insurance
policies (copies of which have been previously delivered to Bancshares), have
been paid, and such policies will continue to remain in force through the
Effective Time. Schedule 3.11 also contains a description of all claims in
excess of $25,000 currently pending under such insurance policies, together with
a list of all other claims in excess of $25,000 which have been filed during the
last three (3) years and a description of the disposition thereof.
 
     Section 3.12. Employment Contracts and Employee Benefit Plans.  A complete
list (as of November 29, 1997) of all employees of Century or CNB, their
respective dates of hire, cash compensation, compensation pursuant to
participation in each of the Plans and the amount of any indebtedness to CNB has
been delivered to Bancshares. On or before the Closing Date, Century and CNB
shall fully accrue for (in accordance with generally accepted accounting
principles) all amounts payable under any of the Plans. Century and CNB has also
delivered to Bancshares a list of all employees who are currently entitled to
perquisites (including, but not limited to, automobiles and club memberships) as
well as a brief description of each such perquisite. Since the date of such
list, no employment contract or Plan has been instituted, agreed to, or changed
by Century or CNB, nor has there
 
                                      A-12
<PAGE>   92
 
been any increase in the compensation payable or to become payable by Century or
CNB to any employee, whose total compensation for services rendered currently
exceeds $15,000 annually.
 
     Section 3.13. Compliance of Employee Benefit Plans with ERISA and Internal
Revenue Code.  (a) As used in this Section 3.13, the following terms have the
meanings set forth below.
 
     "Company Other Benefit Obligation" means an Other Benefit Obligation owed,
adopted, or followed by Century or an ERISA Affiliate of Century.
 
     "Company Plan" means all Plans of which Century or an ERISA Affiliate of
Century is or was a Plan Sponsor, or to which Century or an ERISA Affiliate of
Century otherwise contributes or has contributed, or in which Century or an
ERISA Affiliate of Century otherwise participates or has participated. All
references to Plans are to Company Plans unless the context requires otherwise.
 
     "Company VEBA" means a VEBA whose members include employees of Century or
any ERISA Affiliate of Century.
 
     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations and rules revised pursuant to such Act.
 
     "ERISA Affiliate" means, with respect to Century, any trade or business
(whether or not incorporated) that is part of the same controlled group, or
under common control with, or part of an affiliated service group that includes
Century within the meaning of IRC sec. 414 and or IRC sec. 4001(a)(14).
 
     "Multiemployer Plan" has the meaning given in ERISA sec.sec. 3(37)(A) and
4001(a)(3).
 
     "Other Benefit Obligations" means all obligations, arrangements, or
customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
officers, directors, employees, or agents, other than obligations, arrangements,
and practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of IRC sec. 132.
 
     "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
 
     "Pension Plan" has the meaning given in ERISA sec. 3(2)(A).
 
     "Plan" has the meaning given in ERISA sec. 3(3).
 
     "Plan Sponsor" has the meaning given in ERISA sec. 3(16)(B).
 
     "Qualified Plans" means any Plan that meets or purports to meet the
requirements of IRC sec. 401(a).
 
     "Title IV Plans" means all Pension Plans that are subject to Title IV of
ERISA, 29 U.S.C. sec. 1301 et seq., other than Multiemployer Plans.
 
     "VEBA" means a voluntary employees' beneficiary association under IRC sec.
501(c)(9).
 
     "Welfare Plan" has the meaning given in ERISA sec. 3(1).
 
          (b) (i) Schedule 3.13(b)(i) contains a complete and accurate list of
     all Company Plans, Company Other Benefit Obligations, and Company VEBAs
     existing on the date of this Agreement, and identifies as such all Company
     Plans that are (A) defined benefit Pension Plans, (B) Qualified Plans, (C)
     Title IV Plans, or (D) Multiemployer Plans.
 
          (ii) Schedule 3.13(b)(ii) contains a complete and accurate list of (A)
     all ERISA Affiliates of Century, and (B) all Plans of which any such ERISA
     Affiliate is or was a Plan Sponsor, in which any such ERISA Affiliate
     participates or has participated, or to which any such ERISA Affiliate
     contributes or has contributed.
 
                                      A-13
<PAGE>   93
 
          (iii) Schedule 3.13(b)(iii) sets forth, for each Multiemployer Plan,
     as of its last valuation date, the amount of potential withdrawal liability
     of Century or CNB and the Century's ERISA Affiliates, calculated according
     to information made available pursuant to ERISA sec. 4221(e).
 
          (iv) Schedule 3.13(b)(iv) sets forth a calculation of the liability of
     Century for post-retirement benefits other than pensions, made in
     accordance with Financial Accounting Statement 106 of the Financial
     Accounting Standards Board, regardless of whether Century is required by
     this Statement to disclose such information.
 
          (v) Schedule 3.13(b)(v) sets forth the financial cost of all
     obligations owed under any Company Plan or Company Other Benefit Obligation
     that is not subject to the disclosure and reporting requirements of ERISA.
 
     (c) Century has delivered to Bancshares, or will deliver to Bancshares
within ten days of the date of this Agreement:
 
          (i) all documents that set forth the terms of each Company Plan,
     Company Other Benefit Obligation, or Company VEBA and of any related trust,
     including (A) all plan descriptions and summary plan descriptions of
     Company Plans for which Century or any ERISA Affiliate of Century is
     required to prepare, file, and distribute, and (B) all summaries and
     descriptions furnished to participants and beneficiaries regarding Company
     Plans, Company Other Benefit Obligations, and Company VEBAs for which a
     plan description or summary plan description is not required;
 
          (ii) all personnel, payroll, and employment manuals and policies;
 
          (iii) all collective bargaining agreements pursuant to which
     contributions have been made or obligations incurred (including both
     pension and welfare benefits) by Century and the ERISA Affiliates of
     Century, and all collective bargaining agreements pursuant to which
     contributions are being made or obligations are owed by such entities;
 
          (iv) a written description of any Company Plan or Company Other
     Benefit Obligation that is not otherwise in writing;
 
          (v) all registration statements filed with the SEC with respect to any
     Company Plan and Company Other Benefit Obligation;
 
          (vi) all insurance policies purchased by or to provide benefits under
     any Company Plan and Company Other Benefit Obligation;
 
          (vii) all contracts with third party administrators, actuaries,
     investment managers, consultants, and other independent contractors that
     relate to any Company Plan, Company Other Benefit Obligation, or Company
     VEBA;
 
          (viii) all reports submitted within the four years preceding the date
     of this Agreement by third party administrators, actuaries, investment
     managers, consultants, or other independent contractors with respect to any
     Company Plan, Company Other Benefit Obligation, or Company VEBA;
 
          (ix) copies of all forms of notifications to employees of their rights
     under ERISA sec. 601 et seq. and IRC sec. 4980B;
 
          (x) the Form 5500 filed in each of the most recent six plan years with
     respect to each Company Plan and Company Other Benefit Obligation,
     including all schedules thereto and the opinions of independent
     accountants;
 
          (xi) copies of all forms of notices that were given by Century or any
     ERISA Affiliate of Century or any Company Plan to the IRS, the U.S.
     Department of Labor, the PBGC, or any participant or beneficiary, pursuant
     to statute, regulation or otherwise within the four years preceding the
     date of this Agreement, including notices that are expressly mentioned
     elsewhere in this Section 3.13;
 
                                      A-14
<PAGE>   94
 
          (xii) copies of all forms of notices that were given by the IRS, the
     PBGC, or the Department of Labor to Century, any ERISA Affiliate of
     Century, or any Company Plan within the four years preceding the date of
     this Agreement;
 
          (xiii) with respect to Qualified Plans and VEBAs, the most recent
     determination letter for each Plan of Century that is a Qualified Plan and
     exemption in response to the filing of IRS Form 1024 for each Company VEBA;
     and
 
          (xiv) with respect to Title IV Plans, the Form PBGC-1 filed for each
     of the three most recent plan years.
 
     (d) Except as set forth in Schedule 3.13(d):
 
          (i) Century and Century's ERISA Affiliates has performed all of their
     respective obligations under all Company Plans, Company Other Benefit
     Obligations, and Company VEBAs. Century has made appropriate entries in its
     financial records and statements for all obligations and liabilities under
     such Company Plans, Company VEBAs, and Company Other Benefit Obligations
     that have accrued but are not due.
 
          (ii) No statement, either written or oral, has been made by Century to
     any Person with regard to any Company Plan or Company Other Benefit
     Obligation that was not in accordance with the Company Plan or Company
     Other Benefit Obligation and that could have an adverse economic
     consequence to Century.
 
          (iii) Century, with respect to all Company Plans, Company Other
     Benefits Obligations, and Company VEBAs, is, and each Company Plan, Company
     Other Benefit Obligation, and Company VEBA is, in substantial compliance
     with ERISA, the IRC, and other applicable Laws including the provisions of
     such Laws expressly mentioned in this Section 3.13, and with any applicable
     collective bargaining agreement.
 
             (A) No transactions prohibited by ERISA sec. 406 and no "prohibited
        transaction" under IRC sec. 4975(c) have occurred with respect to any
        Company Plan.
 
             (B) Century has no liability to, and no ERISA Affiliate of Century
        has any liability to, the IRS with respect to any Plan, including any
        liability imposed by Chapter 43 of the IRC.
 
             (C) Century has no liability to, and no ERISA Affiliate of Century
        has any liability to, the PBGC with respect to any Plan or has any
        liability under ERISA sec. 502 or sec. 4071.
 
             (D) All filings required by ERISA and the IRC as to each Company
        Plan, Company VEBA, and Company Other Benefit Obligation have been
        timely filed, and all notices and disclosures to participants required
        by either ERISA or the IRC have been timely provided, except where the
        failure to file or provide would not have a material adverse effect on
        Century.
 
             (E) All contributions and payments made or accrued with respect to
        all Company Plans, Company Other Benefit Obligations, and Company VEBAs
        are deductible under IRC sec. 162 or sec. 404. No amount, or any asset
        of any Company Plan or Company VEBA, is subject to tax as unrelated
        business taxable income.
 
          (iv) Each Company Plan and Company Other Benefit Obligation can be
     terminated within thirty days, without payment of any additional
     contribution or amount and without the vesting or acceleration of any
     benefits promised by such Plan.
 
          (v) Since December 31, 1996, there has been no establishment or
     amendment of any Company Plan, Company VEBA, or Company Other Benefit
     Obligation.
 
          (vi) No event has occurred or circumstance exists that could result in
     a material increase in premium costs of Company Plans and Company Other
     Benefit Obligations that are insured, or a material increase in benefit
     costs of such Company Plans and Company Other Benefit Obligations that are
     self-insured.
 
          (vii) Other than claims for benefits submitted by participants or
     beneficiaries, no claim against, or legal proceeding involving, any Company
     Plan, Company Other Benefit Obligation, or Company VEBA is pending or, to
     Century's Knowledge, is Threatened.
 
                                      A-15
<PAGE>   95
 
          (viii) Each Company Plan that is a Qualified Plan of Century is
     qualified in form and operation under IRC sec. 401(a); each trust for each
     such Qualified Plan is exempt from federal income tax under IRC sec.
     501(a). Each Company VEBA is exempt from federal income tax and qualifies
     under IRC sec. 501(c)(9). No event has occurred or circumstance exists that
     will or could give rise to disqualification or loss of tax-exempt status of
     any such Qualified Plan or trust or Company VEBA.
 
          (ix) With respect to each Company Plan that is a Qualified Plan,
     Century and each ERISA Affiliate of Century has met the minimum funding
     standard, and has made all contributions required, under ERISA sec. 302 and
     IRC sec. 412.
 
          (x) Century has paid all amounts due to the PBGC pursuant to ERISA
     sec. 4007.
 
          (xi) Neither Century nor any ERISA Affiliate of Century has ceased
     operations at any facility or has withdrawn from any Title IV Plan or has
     engaged in a transaction in a manner that would subject to any entity or
     the Surviving Corporation to liability under ERISA sec. 4062(e), sec. 4063,
     or sec. 4065.
 
          (xii) Neither Century nor any ERISA Affiliate of Century has filed a
     notice of intent to terminate any Plan or has adopted any amendment to
     terminate a Plan. The PBGC has not instituted proceedings to terminate any
     Company Plan. No event has occurred or circumstance exists that may
     constitute grounds under ERISA sec. 4042 for the termination of, or the
     appointment of a trustee to administer, any Company Plan.
 
          (xiii) No amendment has been made, or is reasonably expected to be
     made, to any Plan that has required or could require the provision of
     security under ERISA sec. 307 or IRC sec. 401(a)(29).
 
          (xiv) No accumulated funding deficiency, whether or not waived, exists
     with respect to any Company Plan; no event has occurred or circumstance
     exists that may result in an accumulated funding deficiency as of the last
     day of the current plan year of any such Company Plan.
 
          (xv) The actuarial report for each Company Plan that is a Title IV
     Plan of Century and each ERISA Affiliate of Century fairly presents the
     financial condition and the results of operations of each such Title IV
     Plan in accordance with GAAP.
 
          (xvi) Since the last valuation date for each Company Plan that is a
     Title IV Plan of Century and each ERISA Affiliate of Century, no event has
     occurred or circumstance exists that would increase the amount of benefits
     under any such Plan or that would cause the excess of Plan assets over
     benefit liabilities (as defined in ERISA sec. 4001) to decrease, or the
     amount by which benefit liabilities exceed assets to increase.
 
          (xvii) No reportable event (as defined in ERISA sec. 4043 and in
     regulations issued thereunder) has occurred.
 
          (xviii) Century has no Knowledge of any facts or circumstances that
     may give rise to any liability of Century, any ERISA Affiliate of Century
     or the Surviving Corporation to the PBGC under Title IV of ERISA.
 
          (xix) Neither Century nor any ERISA Affiliate of Century has ever
     established, maintained, or contributed to or otherwise participated in, or
     had an obligation to maintain, contribute to, or otherwise participate in,
     any Multiemployer Plan.
 
          (xx) Neither Century nor any ERISA Affiliate of Century has withdrawn
     from any Multiemployer Plan with respect to which there is any outstanding
     liability as of the date of this Agreement. No event has occurred or
     circumstance exists that presents a risk of the occurrence of any
     withdrawal from, or the participation, termination, reorganization, or
     insolvency of, any Multiemployer Plan that could result in any liability of
     either Century or the Surviving Corporation to a Multiemployer Plan.
 
          (xxi) Neither Century nor any ERISA Affiliate of Century has received
     notice from any Multiemployer Plan that it is in reorganization or is
     insolvent, that increased contributions may be required to avoid a
     reduction in plan benefits or the imposition of any excise tax, or that
     such Multiemployer Plan intends to terminate or has terminated.
 
                                      A-16
<PAGE>   96
 
          (xxii) No Multiemployer Plan to which Century or any ERISA Affiliate
     of Century contributes or has contributed is a party to any pending merger
     or asset or liability transfer or is subject to any proceeding brought by
     the PBGC.
 
          (xxiii) Except to the extent required under ERISA sec. 601 et seq. and
     IRC sec. 4980B, Century provides no health or welfare benefits for any
     retired or former employee, officer, director, or any other person, or is
     obligated to provide health or welfare benefits to any active employee,
     officer, director, or any other person, following such employee's
     retirement or other termination of service.
 
          (xxiv) Century has the right to modify and terminate benefits to
     retirees under the Company Plans and Company Other Benefit Obligations with
     respect to both retired and active employees.
 
          (xxv) Century has complied with the provision of ERISA sec. 601 et
     seq. and IRC sec. 4980B.
 
          (xxvi) No payment that is owed or may become due to any director,
     officer, employee, or agent of Century or subject to tax under IRC sec.
     280G or sec. 4999; nor will Century be required to "gross up" or otherwise
     compensate any such person because of the imposition of any excise tax on a
     payment to such person.
 
          (xxvii) The consummation of the Merger will not result in the payment,
     vesting, or acceleration of any benefit under any Company Plan or Company
     Other Benefit Obligation.
 
     Section 3.14. No Undisclosed Liabilities.  Except as set forth in Schedule
3.14, Century and CNB have no material liability or obligation of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Century Balance Sheet and current liabilities incurred in the ordinary
course of business since the date thereof.
 
     Section 3.15. Absence of Certain Changes and Events.  Except as set forth
on Schedule 3.15, since the date of the Century Balance Sheet, each of Century
and CNB has conducted their business only in the ordinary course of business and
there has not been any:
 
          (a) change in Century's authorized or issued capital stock; grant of
     any stock option or right to purchase shares of capital stock of Century;
     issuance of any security convertible into such capital stock; grant of any
     registration rights; purchase, redemption, retirement, or other acquisition
     by Century of any shares of any such capital stock; or declaration or
     payment of any dividend or other distribution or payment in respect of
     shares of capital stock;
 
          (b) amendment to Articles of Incorporation or By-Laws of Century or
     CNB;
 
          (c) any increase in the salary or bonus paid to employees of Century
     or CNB, other than increases which, in the aggregate, were consistent with
     the increases awarded in prior years and which, individually, were
     consistent with management's reasonable evaluation of an individual's
     performance and management's determination of the market level of
     compensation for the individual's services; provided, however, that (i) the
     aggregate salary increases shall not exceed four percent (4%) of the
     aggregate payroll of CNB and (ii) aggregate bonuses shall not exceed 4.5%
     of the 1997 after-tax net income of Century.
 
          (d) adoption of, or increase in the payments to or benefits under, any
     profit sharing, deferred compensation, savings, insurance, pension,
     retirement, or other employee benefit plan for or with any employees of
     Century or CNB;
 
          (e) damage to or destruction or loss of any asset or property of
     Century or CNB, whether or not covered by insurance involving a loss in
     excess of $25,000;
 
          (f) entry into, termination of, or receipt of notice of termination of
     (i) any license, distributorship, dealer, sales representative, joint
     venture, credit, or similar agreement, or (ii) any contract or transaction
     (other than Loans entered into by CNB in the ordinary course of business)
     involving a total remaining commitment by or to Century or CNB of at least
     $25,000;
 
          (g) sale, lease, or other disposition of any asset or property (other
     than OREO properties) of Century or CNB or mortgage, pledge, or imposition
     of any lien or other encumbrance on any material asset or property of
     Century or CNB, other than in the ordinary course of business;
 
          (h) cancellation or waiver of any claims or rights with a value to
     Century or CNB in excess of $25,000;
 
                                      A-17
<PAGE>   97
          (i) material change in the accounting methods used by Century or CNB;
     or
 
          (j) agreement, whether oral or written, by Century or CNB to do any of
     the foregoing.
 
     Section 3.16. Taxes.
 
     (a) Century and CNB have filed or caused to be filed (on a timely basis
since 1992) all tax returns that are or were required to be filed by them
(either separately or as a member of a group of corporations), pursuant to
applicable federal, state and local laws. Century and CNB (either separately or
as a member of a group of corporations) has made available to Bancshares copies
of all such tax returns relating to income or franchise taxes filed since 1992.
Century and CNB have paid, or made provision for the payment of all taxes that
have or may have become due pursuant to those tax returns or otherwise, or
pursuant to any assessment received by Century or CNB, except such taxes if any,
as are listed on Schedule 3.16 and are being contested in good faith and as to
which adequate reserves (determined in accordance with GAAP) have been provided
in the Century Balance Sheet.
 
     (b) The United States federal and state franchise tax returns of Century
have been audited by the IRS or relevant state tax authorities or are closed by
the applicable statute of limitations for all taxable years through 1992.
Schedule 3.16 contains a complete and accurate list of all audits since 1992 of
all such tax returns, including a reasonably detailed description of the nature
and outcome of each audit. All deficiencies proposed as a result of such audits
have been paid, reserved against, settled, or, as described on Schedule 3.16,
are being contested in good faith by appropriate proceedings. Schedule 3.16
describes all adjustments to the United States federal income tax returns filed
by Century and CNB for all taxable years since 1992, and the resulting
deficiencies proposed by the IRS in excess of $5,000. Except as described on
Schedule 3.16, Century and CNB have not given or been requested to give waivers
or extensions (or is or would be subject to a waiver or extension given by any
other third party) of any statute of limitations relating to the payment of
taxes of Century or CNB or for which Century or CNB may be liable.
 
     (c) The charges, accruals, and reserves with respect to taxes on the books
of Century or CNB are adequate (determined in accordance with GAAP) and are at
least equal to Century's or CNB's liability for taxes. There exists no proposed
tax assessment against Century or CNB except as disclosed in the Century's
Balance Sheet or on Schedule 3.16. All taxes that Century and CNB are or was
required by applicable federal, state or local law to withhold or collect have
been duly withheld or collected and, to the extent required, have been paid to
the proper federal, state or local governmental authority.
 
     (d) All tax returns filed by Century and CNB are true, correct, and
complete.
 
     Section 3.17. Compliance with Laws; Licenses.  Except as set forth on
Schedule 3.17, Century and CNB are not engaged in or a party to (as a
defendant), nor do they have any reasonable basis to anticipate, any legal
action, investigation, arbitration, or other proceeding before any court,
administrative agency, arbitrator or other forum, which individually or in the
aggregate would reasonably be expected to have a material adverse effect on
Century and its subsidiaries taken as a whole. Century and CNB have not been
charged with nor to their Knowledge are they under investigation with respect
to, and Century and CNB have no basis to anticipate any charge or investigation
with respect to, any violation of any provision of federal, state, or other
applicable law or administrative regulation (including, without limitation, the
Bank Secrecy Act, the Community Reinvestment Act and applicable consumer
protection and disclosure laws, rules and regulations) which may materially
adversely affect the financial condition, results of operations, assets, or
business of Century or CNB. There is no litigation, proceeding, or governmental
investigation pending or, to Century's Knowledge, threatened (or which Century
or CNB have any reasonable basis to anticipate) which relates to any of the
transactions contemplated by this Agreement or the Agreement of Merger. Century
and CNB have responded to and satisfied all exceptions, if any, arising out of
any federal, state or other regulatory examination. Century and CNB possess all
material licenses, franchises, permits and other governmental authorizations and
all material patents, trademarks, service marks, trade names, copyrights or
rights thereto necessary for the continued conduct of Century's and CNB's
banking business without material interference or interruption.
 
     Section 3.18. No Brokerage and Finder's Fees.  Except for the fees payable
to its financial advisor, Danielson & Associates, Inc. ("Danielson"), neither
Century nor CNB have employed any broker, finder, or
                                      A-18
<PAGE>   98
 
agent, or agreed to pay or incurred any brokerage fee, finder's fee, commission
or other similar form of compensation in connection with this Agreement or the
transactions contemplated hereby.
 
     Section 3.19. Authorization for this Agreement.  Other than as contemplated
in Articles VI and VII hereof, no authorization, approval, or consent of any
governmental department, bureau or agency, or other public board or authority is
required for the consummation by Century or CNB of the transactions contemplated
by this Agreement.
 
     Section 3.20. Board Approval; Submission to Shareholders.  The Board of
Directors of Century has unanimously approved this Agreement, and will direct
that this Agreement be submitted to a vote of Century's shareholders at either
its 1998 annual meeting or at a special meeting of shareholders to be called for
that purpose, all in accordance with and as required by law and in accordance
with the Articles of Incorporation and By-Laws of Century.
 
     Section 3.21. Certain Transactions.  Except as set forth in Schedule 3.21,
Century and CNB have no business relationships or business transactions (other
than indebtedness incurred in the ordinary course of business on credit and
other terms generally available to CNB customers which indebtedness is not "past
due"), with or to any of their Related Persons, their officers or directors, or
any of such officers' or directors' Related Persons. For the purposes of this
Section 3.21, "Related Person" shall mean, with respect to a particular
individual, (a) each other member of such individual's Family, (b) any Person
that is directly or indirectly controlled by such individual or one or more
members of such individual's Family, (c) any Person in which such individual or
members of such individual's Family hold (individually or in the aggregate) a
Material Interest, and (d) any Person with respect to which such individual or
one or more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity). With respect to a
specified Person other than an individual, "Related Person" shall mean (a) any
Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such
specified Person, (b) any Person that holds a Material Interest in such
specified Person, (c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity), (d)
any Person in which such specified Person holds a Material Interest, (e) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity), and (f) any Related Person of any
individual described in clause (b) or (c). For purposes of the definition of
"Related Person," (A) the "Family" of an individual includes (i) the individual,
(ii) the individual's spouse and former spouses, (iii) any other natural person
who is related to the individual or the individual's spouse within the second
degree, and (iv) any other natural person who resides with such individual, (B)
"Material Interest" means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of voting
securities or other voting interests representing at least 5% of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least 5% of the outstanding equity securities or equity
interests in a Person, and (C) "Person" means any individual, corporation,
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union or other entity or
governmental entity.
 
     Section 3.22. No Violation of Environmental Laws.  The business as
currently being conducted by Century and CNB and all real property in which
Century or CNB has an interest, complies in all material respects with any
applicable law or regulation relating to air, water, or noise pollution or the
production, storage, treatment, labeling, transportation, or disposition of
wastes or hazardous or toxic substances or waste materials.
 
     Section 3.23. Accounting Matters.  Neither Century or CNB nor, to their
best Knowledge, any of their affiliates, have through the date of this Agreement
taken or agreed to take any action that would prevent Bancshares from accounting
for the business combination contemplated by this Agreement as a "pooling of
interests".
 
     Section 3.24. Compliance with Securities Laws.  To the best of its
Knowledge, Century is in compliance with all federal and state securities laws
and regulations, including but not limited to all filing requirements, except to
the extent that additional filings will be required in connection with the
transactions contemplated by this Agreement. All information provided in such
filings is accurate and complete, in all material respects, to the extent
required by such laws and regulations.
 
                                      A-19
<PAGE>   99
 
     Section 3.25. Material Misstatements or Omissions.  No representation or
warranty by Century or CNB in this Agreement or any document, statement,
certificate, schedule, or exhibit furnished or to be furnished to Bancshares by
or on behalf of Century or CNB pursuant hereto contains, or will when furnished
contain, any untrue statement of a material fact, or omits, or will then omit to
state, a material fact necessary to make the statement(s) of facts contained
therein (in light of the circumstances under which they were made), not
misleading.
 
                                   ARTICLE IV
 
                            COVENANTS OF BANCSHARES
 
     Bancshares covenants and agrees with Century, as follows:
 
     Section 4.1. No Breaches of Representations and Warranties.  Between the
date of this Agreement and the Effective Time, without the written consent of
Century, Bancshares will not do any act or suffer any omission of any nature
whatsoever which would cause any of the representations or warranties made in
Article II of this Agreement to become untrue or incorrect in any material
respect.
 
     Section 4.2. Information Regarding Bancshares.  Bancshares shall furnish to
Century all information concerning Bancshares and its subsidiaries required by
applicable securities or corporation laws to be set forth in the proxy materials
required to be delivered by Century to its shareholders in connection with this
Agreement and the transactions contemplated hereby .
 
     Section 4.3. Correction of Information.  Bancshares shall promptly correct
and supplement any information furnished under this Agreement to Century so that
such information shall be correct and complete in all material respects at all
times, and shall include all facts necessary to make such information correct
and complete in all material respects at all times.
 
     Section 4.4. Consents.  Bancshares shall use its best efforts to obtain any
required consents to the transactions contemplated by this Agreement.
 
     Section 4.5. Access to Information.  Between the date of this Agreement and
the Closing Date, to the extent reasonable under the circumstances, the officers
of Bancshares will confer with the representatives of Century and will furnish
to Century either orally or by means of such records, documents, and memoranda
as are reasonably available or capable of preparation (all of which Century will
be permitted to make copies of) and such other information as Century may
reasonably request. Bancshares will confer with representatives of Danielson,
will cooperate to the fullest extent reasonably possible with Danielson, and
will furnish such records, documents, memoranda and all such other information
as Danielson may reasonably request in order for Danielson to prepare and
provide a "fairness opinion".
 
     Section 4.6. Accounting and Tax Treatment.  Bancshares agrees not to take
any actions subsequent to the date of this Agreement that would adversely affect
the ability of Bancshares to treat the Merger as a "pooling-of-interests" in
accordance with GAAP or the characterization of the Merger as a tax-free
reorganization under Section 368(a) of the IRC, and Bancshares agrees to take
such action as may be reasonably required, if such action may be reasonably
taken to reverse the impact of any past actions which would adversely impact the
ability of Bancshares to treat the Merger as a "pooling-of-interests" for
accounting purposes or for the Merger to be characterized as a tax-free
reorganization under Section 368(a) of the IRC.
 
     Section 4.7. Nasdaq Listing.  Bancshares will file a listing application,
or a Nasdaq Notification Form for Change in the Number of Shares Outstanding, as
required by Nasdaq, at the time prescribed by applicable rules and regulations.
In addition, Bancshares will use its best efforts to maintain its listing on the
Nasdaq National Stock Market.
 
     Section 4.8. Shareholder Approval.  Bancshares shall take all action
necessary in accordance with applicable law and its Articles of Incorporation
and Regulations to duly call and hold a meeting of its shareholders, to be held
as promptly as practicable after the Registration Statement is declared
effective by the SEC, to consider and vote on the adoption and approval of the
Merger. The Board of Directors of Bancshares
 
                                      A-20
<PAGE>   100
 
shall recommend that its shareholders adopt and approve the Merger and shall
take all lawful action (including the solicitation from shareholders of proxies
in favor of such adoption and approval) to secure the vote or consent of
shareholders required to adopt and approve the Merger unless otherwise required
by the applicable fiduciary duties of the directors of Bancshares as determined
by such Board of Directors in good faith after consultation with and based upon
advice of independent legal counsel.
 
     Section 4.9. Post-Affiliation Board Structure Director Nominees.
 
     (a) Bancshares shall cause the Nominating Committee of its Board of
Directors to nominate for election to Bancshares' Board of Directors three
members of Century's Board of Directors, namely, Del E. Goedeker, Charles I.
Homan, and Joseph N. Tosh, II and, at the Effective Time, such individuals shall
have been elected by Bancshares shareholders to serve on the Board of Directors
of Bancshares, and one of them shall have been designated by Bancshares for
membership on the Executive Committee of the Board of Directors.
 
     (b) To the extent Messrs. Goedeker, Homan or Tosh shall have been nominated
to serve on Bancshares' Board of Directors for terms less than 3 years, the
Bancshares' Nominating Committee shall, upon the expiration of any such
individual's term, nominate such individual to serve for a subsequent three year
term.
 
     (c) Effective at the Effective Time, four members of Century's Board of
Directors, namely, Del F. Goedeker, Charles I. Homan, Joseph N. Tosh, II and
Thomas K. Reed shall have been elected by Bancshares (as the sole shareholder of
Citizens), to serve on the Board of Directors of Citizens; provided, however,
that until the CNB Merger, such persons shall be entitled to receive meeting
(and not retainer) fees from Citizens. Messrs. Goedeker, Homan, Tosh and Reed
shall also continue to serve on the Board of Directors of CNB until the CNB
Merger (as defined in Section 4.11).
 
     (d) Effective at the Effective Time, three members of Bancshares' Board of
Directors designated by Bancshares shall have been elected by Bancshares (as the
sole shareholder of CNB) to serve on the Board of Directors of CNB; provided,
however, that such persons shall only be entitled to receive meeting (and not
retainer) fees from CNB.
 
     (e) From the Effective Time until the CNB Merger, the current members of
the CNB Board of Directors shall continue to serve on the CNB Board of Directors
and receive the same retainer and meeting fees as in effect on the date of this
Agreement.
 
     Section 4.10. Formation of Century Advisory Board.  At the Effective Time
of the CNB Merger, the members of the CNB Board of Directors who are not also
members of Citizens' Board of Directors shall be given the opportunity to serve
on an advisory board to Citizens -- Century Division to be known as the "Century
Advisory Board".
 
     Section 4.11. CNB Merger With Citizens; Century Name.  It is understood and
agreed that for at least a six (6) month period from the Closing Date, CNB shall
be operated as a separate banking subsidiary of Bancshares. Thereafter,
Bancshares, in its discretion shall effectuate a merger of CNB with and into
Citizens (the "CNB Merger"). Following the Closing Date, the "Century" name will
continue to be featured in all CNB signage and literature and following the CNB
Merger, Bancshares would anticipate given the notable recognition associated
with the "Century" name that it would continue to be used as appropriate in the
markets serviced by CNB.
 
     Section 4.12. Opportunity of Employment; Employee Benefits.  Bancshares
shall offer the existing employees of Century and CNB the opportunity to
continue as employees of CNB on the Closing Date for a period ending December
31, 1998; subject, however, to the right to terminate any such employees for
"cause". It is understood and agreed that nothing in this Section 4.12 or
elsewhere in this Agreement shall be deemed to be a contract of employment or be
construed to give said employees any rights other than as employees at will
under applicable law and said employees shall not be deemed to be third-party
beneficiaries of this provision; provided, that employees shall have the right
to enforce the first sentence of Section 4.12 through December 31, 1998.
 
     Prior to the CNB Merger, a committee comprised of three (3) employees of
each of CNB and Citizens will be formed to evaluate and make recommendations to
the Bancshares' Board of Directors with respect to the merger of their
respective employee benefit plans.
 
                                      A-21
<PAGE>   101
 
     At the time of the CNB Merger, the Employees Retirement Plan of Century
National Bank and Trust Company, as amended and restated effective January 1,
1989 ("Merged Plan") shall be merged into the Employees Retirement Plan for
Citizens Bancshares, Inc. ("Bancshares Plan"). As of the date the plans are
merged, Bancshares Plan shall provide accrued benefits to all former
participants in the Merged Plan that are equal to the total of (1) and (2)
below:
 
          (1) The accrued benefits for all employment service prior to the date
     the plans are merged shall equal the benefits accrued under the Merged Plan
     as of the date the plans are merged. These accrued benefits shall continue
     to provide (i) any early retirement benefit or Early Retirement Type
     subsidy (as defined by IRS Section 411(d)(6)) and (ii) all optional forms
     of benefit provided by the Merged Plan.
 
          (2) Benefits shall be accrued with respect to all employment service
     on and after the date of the plans are merged, subject to all of the
     provisions of the Bancshares Plan, including, but not limited to,
     eligibility for benefits and benefit amounts. The amount of such further
     accrual of benefits shall, however, be based solely on employment service
     on and after the date the Plans are merged.
 
     Solely for purposes of determining Years of Vesting Service, the Bancshares
Plan shall recognize all years of service with Century and its predecessors that
were credited under the Merged Plan for eligibility and vesting purposes; such
service shall not, however, be recognized for purposes of determining the
accrual of benefits under paragraph (2) above.
 
     All Century and CNB employees who become employees of Citizens or one of
Bancshares' other affiliates upon the consummation of the CNB Merger shall have
their years of service with Century and its predecessors credited for
eligibility and vesting purposes but not for accrual of benefit purposes under
all Bancshares' Employee Benefit Plans (as defined in Section 3(3) of ERISA) and
other fringe benefit programs (including vacation), except with respect to
Bancshares' ESOP Plan. Nothing in this paragraph shall be construed as limiting
Citizens' ability to amend or terminate any such Plan or program (including
vacation) prior to, coincident with or subsequent to the consummation of the CNB
merger.
 
                                   ARTICLE V
 
                              COVENANTS OF CENTURY
 
     Century hereby covenants and agrees with Bancshares as follows:
 
     Section 5.1. No Breaches of Representations and Warranties.  Between the
date of this Agreement and the Effective Time, without the written consent of
Bancshares, Century will not do any act or suffer any omission of any nature
whatsoever which would cause any of the representations or warranties made in
Article III of this Agreement to become untrue or incorrect in any material
respect.
 
     Section 5.2. Carry on Business in Normal Manner.  From the date of this
Agreement to the Closing Date, Century and CNB shall carry on their business in
substantially the same manner as heretofore and, without the written consent of
Bancshares, Century and CNB shall not (a) do any of the things which they
represent and warrant herein have not been done since December 31, 1996 or the
date hereof, as the case may be, except as necessary to carry out this Agreement
on the part of Century and CNB; (b) engage in any transaction which would be
inconsistent with any other representation or warranty of Century (or with
respect to CNB, as applicable) set forth herein or which would cause a breach of
any such representation or warranty if made at or immediately following such
transaction; or (c) engage in any lending activities other than in the ordinary
course of business consistent with past practice. Century shall send to
Bancshares via facsimile transmission a copy of all loan presentations made to
CNB's loan committee at the same time as such presentations are transmitted to
said committee, to enable one of Bancshares senior loan committee members to
review, comment and make reasonable recommendations to the loan committee with
respect to such loan presentations. Century and CNB shall consult with
Bancshares prior to hiring any full-time employees other than replacement
employees for positions then existing. Century will use its best efforts to keep
its (and CNB's) business organizations intact, to keep available the services of
present employees, and to preserve the goodwill of customers, suppliers, and
others having business relations with them.
 
                                      A-22
<PAGE>   102
 
     Section 5.2. Access to Information.  Between the date of this Agreement and
the Closing Date, to the extent reasonable under the circumstances, the officers
of Century will confer with the representatives of Bancshares and will furnish
to Bancshares either orally or by means of such records, documents, and
memoranda as are reasonably available or capable of preparation (all of which
Bancshares will be permitted to make copies of) and such other information as
Bancshares may reasonably request. Century will confer with the representatives
of Sandler, O'Neill, will cooperate to the fullest extent reasonably possible
with Sandler O'Neill and will furnish such records, documents, memoranda and all
such other information as Sandler O'Neill may reasonably request in order for
Sandler, O'Neill to prepare and provide a fairness opinion.
 
     Section 5.3. Consents.  Century shall use its best efforts to obtain any
required consents to the transactions contemplated by this Agreement.
 
     Section 5.4. Insurance Coverage.  Century shall cause the policies of
insurance listed in the Disclosure Schedule to remain in effect between the date
of this Agreement and the Closing Date.
 
     Section 5.5. Compliance with Securities Laws.  Century shall cooperate with
Bancshares in doing all things necessary to comply with the state and federal
securities laws applicable to the transactions contemplated by this Agreement.
 
     Section 5.6. Shareholder Approval.  Century shall take all action necessary
in accordance with applicable law and its Articles of Incorporation and By-Laws
to duly call and hold a meeting of its shareholders, to be held as promptly as
practicable after the Registration Statement is declared effective by the SEC,
to consider and vote on the adoption and approval of the Merger. The Board of
Directors of Century shall recommend that its shareholders adopt and approve the
Merger and shall take all lawful action (including the solicitation from
shareholders of proxies in favor of such adoption and approval) to secure the
vote or consent of shareholders required to adopt and approve the Merger unless
otherwise necessary under the applicable fiduciary duties of the directors of
Century as determined by such Board of Directors in good faith after
consultation with and based upon advice of independent legal counsel.
 
     Section 5.7. Correction of Information.  Century and CNB shall promptly
correct and supplement any information furnished under this Agreement to
Bancshares so that such information shall be correct and complete in all
material respects at all times, and shall include all facts necessary to make
such information correct and complete in all material respects at all times.
 
     Section 5.8. Other Offers.  On and after the date hereof, except with the
written consent of Bancshares, Century shall not directly or indirectly solicit
or encourage (nor shall Century permit any of its officers, directors, employees
or agents directly or indirectly to solicit or encourage), including by way of
furnishing information, any inquiries or proposals for a merger, consolidation,
share exchange or similar transaction involving Century or for the acquisition
of the shares or all or substantially all of the assets or business of Century,
or discuss with or enter into conversations with any person, other than Century
shareholders or employees, concerning any such merger, consolidation, share
exchange, acquisition or other transaction, other than the share exchange with
Bancshares', provided, that to the extent the Board of Directors of Century
determines in good faith, after consultations with independent legal counsel
that it is required by its fiduciary duties to do so, Century may furnish to a
third party, upon written request, the Danielson Information Memorandum. Century
will promptly notify Bancshares orally (to be confirmed in writing as soon as
practicable thereafter) of all of the relevant details relating to any inquiries
or proposals that it may receive relating to any such matters, including actions
it intends to take with respect to such matters.
 
     Section 5.9. Dividends.  On and after the date hereof, Century shall not
declare, set aside, pay or make any dividend or other distribution or payment
(whether in cash, stock or property) with respect to, or purchase or redeem, any
shares of its capital stock other than (i) regular quarterly cash dividends each
in an amount not to exceed $.11 per share and (ii) the repurchase of Century
Common Shares by Century in the market in amounts necessary to satisfy its
obligations under Century's Dividend Reinvestment Plan and Employee Stock
Purchase Plan. It is agreed by the parties hereto that they will cooperate to
assure that as a result of the Merger, during any quarter, there shall not be a
payment of both a Bancshares and Century dividend. The parties further agree
that if the Closing Date is at the end of a fiscal quarter, then they will
cooperate to assure that the Century shareholders
 
                                      A-23
<PAGE>   103
 
receive the dividend, if any, declared by Century rather than the dividend for
that quarter, if any, declared by Bancshares.
 
     Section 5.10. Accounting and Tax Treatment.  Century agrees not to take any
actions subsequent to the date of this Agreement that would adversely affect the
ability of Century to treat the Merger as a "pooling-of-interests" in accordance
with GAAP or the characterization of the Merger as a tax-free reorganization
under Section 368(a) of the IRC, and Century agrees to take such action as may
be reasonably required, if such action may be reasonably taken to reverse the
impact of any past actions which would adversely impact the ability of Century
to treat the Merger as a "pooling-of-interests" for accounting purposes or for
the Merger to be characterized as a tax-free reorganization under Section 368(a)
of the IRC.
 
     Section 5.11. Large Deposits.  Prior to the Closing, CNB will have provided
Bancshares with a list of (i) all certificates of deposit, checking, savings or
other deposits in excess of $100,000; and (ii) all customers with aggregate
deposits in excess of $500,000.
 
                                   ARTICLE VI
 
                 JOINT COVENANTS OF CENTURY, CNB AND BANCSHARES
 
     Section 6.1. Confidentiality.  Except for the use of information in
connection with the Registration Statement described in Section 7.1 hereof and
any other governmental filings required in order to complete the transactions
contemplated by this Agreement, all information (collectively, the
"Information") received by each of Century and Bancshares pursuant to the terms
of this Agreement shall be kept in strictest confidence; provided that,
subsequent to the filing of the Registration Statement with the Securities and
Exchange Commission, this Section 6.1 shall not apply to information included in
the Registration Statement or to be included in the official proxy/prospectus to
be sent to the shareholders of each of Century and Bancshares under Section 7.1
(individually, a "Prospectus/Proxy Statement" and collectively, the
"Prospectus/Proxy Statements"). Century and Bancshares agree that the
Information will be used only for the purpose of completing the transactions
contemplated by this Agreement and the Agreement of Merger. Century and
Bancshares agree to hold the Information in strictest confidence and shall not
use, and shall not disclose directly or indirectly any of such Information
except when, after and to the extent such Information (i) is or becomes
generally available to the public other than through the failure of Century or
Bancshares, as the case may be, to fulfill its obligations hereunder, (ii) was
already known to the party receiving the Information on a nonconfidential basis
prior to the disclosure or (iii) is subsequently disclosed to the party
receiving the Information on a nonconfidential basis by a third party having no
obligation of confidentiality to the party disclosing the Information. It is
agreed and understood that the obligations of Century and Bancshares contained
in this Section 6.1 shall survive the Closing. In the event the transactions
contemplated by this Agreement are not consummated, Century and Bancshares agree
to return all copies of the Information provided to the other promptly.
 
     Section 6.2. Regulatory Approvals.  As promptly as practicable after the
date hereof, each of Bancshares and Century shall use its best efforts,
separately and jointly with the other party, in good faith to take or cause to
be taken all such steps as shall be necessary or advisable to obtain all
consents and approvals of governmental authorities as are required by law or
otherwise to effect the Merger, including without limitation the Approvals and
shall do any and all acts and things reasonably necessary or advisable in order
to cause the Merger to be completed on the terms provided in this Agreement as
soon as reasonably practicable thereafter.
 
     Section 6.3. Announcements.  Except as may be required by law or as
otherwise contemplated herein, no party shall make any public announcements or
filing or disclosure to third parties of the transaction contemplated herein or
the other party's involvement therein without the prior written approval of the
other party. The restrictions contained in this Section shall not apply to
disclosures made by either party to its stockholders, suppliers or customers to
the extent appropriate to consummate the transactions contemplated by this
Agreement. Each party shall endeavor to give the other at least one (1) business
day's prior notice of announcements to the public, which notice shall be
accompanied by a copy of the text of the proposed disclosure.
 
                                      A-24
<PAGE>   104
 
                                  ARTICLE VII
 
                    REGISTRATION OF BANCSHARES COMMON SHARES
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
 
     Section 7.1. Registration Statement.  Bancshares and Century acknowledge
that the transactions contemplated hereby are subject to the provisions of the
Securities Act of 1933, as amended (the "Act") and Rule 145 thereunder.
Bancshares agrees to prepare and file, as soon as practicable after the
execution of this Agreement, a registration statement on Form S-4 (the
"Registration Statement") under and pursuant to the provisions of the Act for
the purposes of (i) filing the Prospectus/Proxy Statements to be used by Century
and Bancshares to obtain the approval of their respective shareholders of the
transactions contemplated by this Agreement and (ii) registering the Bancshares
Common Shares to be issued in connection with the transactions contemplated
hereby. Century agrees to provide promptly to Bancshares, information concerning
the business and financial condition and affairs of Century as may be required
or appropriate for inclusion in the Registration Statement and to cause its
counsel and auditors to cooperate with Bancshares' counsel and auditors in the
preparation of such Registration Statement. Bancshares agrees to use its best
efforts to have such Registration Statement declared effective under the Act as
soon as may be practicable and each of Bancshares and Century agrees to
distribute its respective Prospectus/Proxy Statement contained in such
Registration Statement to its respective shareholders not less than twenty (20)
business days prior to the scheduled meeting of its shareholders that will be
held to consider approval of this Agreement. Except to the extent permitted by
Rule 145(b) under the Act, Bancshares and Century agree not to publish any
communication other than the Prospectus/Proxy Statements, in respect of this
Agreement or the transactions contemplated hereby. Any communication by either
party under Rule 145(b) will be made only upon the written approval of the
other. Bancshares and Century agree that, between the date the Registration
Statement becomes effective and the Closing Date, they will keep each other
advised on a current basis of material developments concerning their respective
businesses, including any event which would cause their respective
Prospectus/Proxy Statement to contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading. Bancshares shall not be required to maintain the effectiveness of
the Registration Statement for the purpose of resale of Bancshares Common Shares
by Century shareholders who may be deemed to be affiliates of Century, as such
term is defined in Rule 145 promulgated under the Act (individually, an
"Affiliate" and collectively, the "Affiliates").
 
     Section 7.2. Affiliates' Certificates.  Each Affiliate of Century shall
furnish to Bancshares a letter representing that such Affiliate will not sell,
assign, or transfer any of the Bancshares Common Shares received by such
Affiliate as a result of the transactions contemplated by this Agreement, except
pursuant to (a) registration under the Act or (b) a transaction permitted by
Rule 145 under the Act, or (c) a transaction in which, in the opinion of Squire,
Sanders & Dempsey L.L.P. or other counsel satisfactory to Bancshares, or in
accordance with a "no action" letter from the staff of the Securities and
Exchange Commission, the Bancshares Common Shares are not required to be
registered under the Act; and in the event of sale or other disposition pursuant
to Rule 145 such Affiliate will supply reasonably satisfactory evidence of
compliance with such Rule to Bancshares. With respect to such representations,
each Affiliate shall agree to hold harmless and indemnify Bancshares and
Bancshares' officers and directors from and against any losses, claims, damages,
expenses (including reasonable attorneys' fees), or liabilities to which
Bancshares or any officer or director of Bancshares may become subject under the
Act or otherwise as a result of the untruth, breach, or failure of such
representations. Each Affiliate shall further agree that the certificate or
certificates representing the Bancshares Common Shares issued to such Affiliate
upon the consummation of the Share Exchange may bear the following restrictive
legend:
 
          The shares represented by this certificate have been issued or
     transferred to the registered holder as a result of a transaction to which
     Rule 145 under the Securities Act of 1933, as amended (the "Act"), applies.
     The shares represented by this certificate may not be sold, transferred or
     assigned, and the issuer shall not be required to give effect to any
     attempted sale, transfer or assignment, except pursuant to (i) an effective
     registration statement under the Act, (ii) a transaction permitted by Rule
     145 and as to which the issuer has received reasonable and satisfactory
     evidence of compliance with the provisions of Rule 145, or (iii) a
     transaction in which, in the opinion of Squire, Sanders & Dempsey L.L.P. or
     other counsel satisfactory to
 
                                      A-25
<PAGE>   105
 
     the issuer or in accordance with a "no action" letter from the staff of the
     Securities and Exchange Commission, such shares are not required to be
     registered under the Act.
 
     Bancshares covenants and agrees to remove the foregoing restrictive legend
from the certificate or certificates representing the Bancshares Common Shares
issued to an Affiliate and to cancel any stop order instructions with respect
thereto upon receipt of advice from its counsel that such actions are
appropriate under the then-existing circumstances.
 
     Section 7.3. Blue Sky Registration.  Bancshares shall, to the extent
required by applicable state securities or "blue sky" laws, as promptly as
practicable after the furnishing by Century of all information regarding Century
required or desirable to be reflected therein, file with applicable state
securities or blue sky administrators, and use its best efforts to cause to
become effective or be approved, all registration statements or applications
required to be so filed with respect to the issuance of the Bancshares Common
Shares in connection with the Agreement of Merger.
 
     Section 7.4. Supplemental Assurances.
 
     (a) On the date the Registration Statement becomes effective and on the
Closing Date, Century shall deliver to Bancshares a certificate signed by its
principal executive officer and its principal financial officer to the effect,
to such officers' Knowledge, that the information contained in the Registration
Statement relating to the business and financial condition and affairs of
Century, does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
 
     (b) On the date the Registration Statement becomes effective and on the
Closing Date, Bancshares shall deliver to Century a certificate signed by the
chief executive officer and by the chief financial officer of Bancshares to the
effect, to such officers' Knowledge, that the Registration Statement (other than
the information contained therein relating to the business and financial
condition and affairs of Century) does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
 
                                  ARTICLE VIII
 
                                   CONDITIONS
 
     Section 8.1. Conditions to Bancshares' Obligations.  The obligation of
Bancshares to consummate the transactions contemplated by this Agreement, shall
be subject to the following conditions, except as Bancshares may waive the same
in writing:
 
          (a) No Material Adverse Change.  From December 31, 1996, to the
     Closing Date, there shall have been no material adverse change in the
     financial condition, results of operations, business, or assets of Century
     or CNB, and there shall have been no occurrence or circumstances which
     would reasonably be expected to result in any such material adverse change.
 
          (b) Conduct of Business in Ordinary Course.  From December 31, 1996,
     to the Closing Date, Century and CNB will have conducted business only in
     the ordinary and usual course except for matters expressly referred to in
     this Agreement or the Disclosure Schedule, matters incident to carrying out
     this Agreement and such further matters as may be consented to in writing
     by Bancshares.
 
          (c) Opinion of Century's Counsel.  Century's counsel, Buchanan,
     Ingersoll Professional Corporation, shall have delivered to Bancshares its
     opinion, dated the Closing Date, to the effect that (i) Century is a bank
     holding company duly registered under the BHCA and a corporation duly
     organized under the laws of the Commonwealth of Pennsylvania and is in good
     standing under the laws of the Commonwealth of Pennsylvania, (ii) CNB is a
     national banking association duly organized under the laws of the United
     States and is in good standing under the laws of the United States, (iii)
     this Agreement has been duly executed by Century and constitutes a binding
     obligation of Century, enforceable in accordance with its terms against
     Century, (iv) assuming that the merger is duly authorized by Bancshares and
     its shareholders and that Bancshares has taken all action required to be
     taken by it prior to the Effective Time, upon the filing of the
 
                                      A-26
<PAGE>   106
 
     Certificate of Merger with the Secretary of State of Ohio and the Articles
     of Merger with the Department of State of the Commonwealth of Pennsylvania
     in accordance with Section 1.1., the Merger will become effective under
     Pennsylvania law.
 
          (d) Accuracy of Representations and Warranties and Compliance with
     Covenants on Closing Date. The representations and warranties made herein
     by Century and CNB in Article III hereof shall be correct in all material
     respects on and as of the Closing Date, with the same force and effect as
     though such representations and warranties were being made on and as of the
     Closing Date (except for representations and warranties made as of an
     earlier date, which representations and warranties shall have been correct
     in all material respects as of such earlier date), and Century and CNB
     shall have fully complied with all the terms and conditions hereof, and
     Century and CNB shall have delivered to Bancshares a certificate to that
     effect, which certificate shall be signed by the President of each of
     Century and CNB and shall be in a form reasonably satisfactory to
     Bancshares.
 
          (e) Affiliates' Certificates.  Bancshares shall have received from
     each Affiliate a certificate in the form specified in Section 7.2 hereof.
 
          (f) Officers' Certificates Regarding Registration
     Statement.  Bancshares shall have received from Century the officers'
     certificates required pursuant to Section 7.4(a) hereof.
 
          (g) Fairness Opinion.  The receipt of a fairness opinion from Sandler
     O'Neill dated as of a date reasonably proximate to the Effective Date of
     the Registration Statement stating that as of the date of such opinion, the
     transactions contemplated by this Agreement fair to the Bancshares
     shareholders from a financial point of view.
 
          (h) Dissenters' Rights.  Holders of Century Common Shares that shall
     have taken such actions as are required by the Pennsylvania Business
     Corporation Law of 1988, as amended, to assert dissenters' rights, combined
     with fractional shares for which cash is paid and any shares that are
     deemed to be in contemplation of the combination when determining whether
     the pooling-of-interests method of accounting is appropriate under GAAP,
     may not exceed ten percent (10%) of the issued and outstanding Century
     Common Shares.
 
          (i) No Default.  There shall have occurred no event constituting a
     default under any material indenture, agreement, note, mortgage, guaranty
     or other writing which evidences or relates to any loan of money to, or
     indebtedness for money borrowed by Century or CNB which materially
     adversely affects Century's or CNB's financial condition.
 
          (j) Accounting Treatment.  Bancshares shall have received from Crowe,
     Chizek and Company LLP, a letter dated the Closing Date, in substance
     reasonably acceptable to Bancshares, stating its opinion that based upon
     the information furnished that the transactions contemplated by this
     Agreement should be accounted for by Bancshares as a "pooling of interests"
     for financial statement reporting purposes and that such accounting
     treatment is in accordance with generally accepted accounting principles.
 
          (k) Employment Agreements.  Each of Donald A. Benziger, Edwin C.
     Schaffnit and C. David Becker shall have entered into employment agreements
     with CNB in the respective forms attached hereto as Exhibits A, B and C to
     this Agreement, which agreements shall be assumed by Bancshares on the
     Closing Date, and Joseph N. Tosh, II, shall have entered into an Employment
     Agreement in the form attached hereto as Exhibit D, which shall go into
     effect at the Effective Time.
 
     Section 8.2. Conditions to Century's Obligations.  The obligation of
Century to consummate the transactions contemplated by this Agreement shall be
subject to the following conditions, except as Century may waive the same in
writing:
 
          (a) No Material Adverse Change.  From December 31, 1996, through the
     Closing Date, there shall have been no material adverse change in the
     financial condition, results of operation, business or assets of Bancshares
     and there shall have been no occurrence or circumstance (whether arising
     heretofore or hereafter) which might reasonably be expected to result in
     any such material adverse change.
 
                                      A-27
<PAGE>   107
 
          (b) Opinion of Bancshares' Counsel.  Bancshares' general counsel, Rick
     Hull, Esq., shall have delivered to Century an opinion dated the Closing
     Date to the effect that (i) Bancshares is a corporation duly organized and
     in good standing under the State of Ohio, (ii) Citizens is a corporation
     duly organized and in good standing as a state banking association under
     the laws of the State of Ohio, (iii) this Agreement has been duly executed
     by Bancshares and constitutes the binding obligation of Bancshares,
     enforceable into in accordance with its terms against Bancshares, (iv)
     assuming that the Merger is duly authorized by Century and its shareholders
     and that Century has taken all action required to be taken by it prior to
     the Effective Time, upon the filing of the Certificate of Merger with the
     Secretary of State of the State of Ohio and the Articles of Merger with the
     Department of State and the Commonwealth of Pennsylvania in accordance with
     Section 1.1, the Merger will become effective and each Century Common Share
     outstanding will be converted into Bancshares Common Shares in accordance
     with Section 1.2 hereof, and (v) all of the Bancshares Common Shares to be
     issued to the shareholders of Century have been validly authorized.
 
          (c) Accuracy of Representations and Warranties and Compliance with
     Covenants on Closing Date. The representations and warranties made herein
     by Bancshares shall be correct in all material respects on and as of the
     Closing Date, with the same force and effect as though such representations
     and warranties were being made on and as of the Closing Date (provided,
     however, that nothing herein contained shall be construed to place any
     limitations upon the issuance of additional shares or other securities of
     Bancshares) and Bancshares shall have fully complied with all the terms and
     conditions hereof, and Bancshares shall have delivered to Century a
     certificate to that effect, which certificate shall be signed by the
     President of Bancshares and shall be in a form reasonably satisfactory to
     Century.
 
          (d) Officers' Certificates Regarding Registration
     Statement.  Bancshares shall have furnished to Century the officers'
     certificates required pursuant to Section 7.4(b) hereof.
 
          (e) Fairness Opinion.  The receipt of a fairness opinion from
     Danielson dated as of a date reasonably proximate to the Effective Date of
     the Registration Statement stating that as of the date of such opinion, the
     transaction contemplated by this Agreement is fair to the Century
     shareholders from a financial point of view.
 
          (f) Tax Opinion.  Century shall have obtained an opinion of its
     counsel, reasonably satisfactory in form and substance to it and dated as
     of Closing, to the effect that (i) the Merger will constitute a tax-free
     reorganization within the meaning of Section 368(a)(1)(A) of the IRC, (ii)
     no gain or loss will be recognized by Century as a consequence of the
     Merger, and (iii) no gain or loss will be recognized by the shareholders of
     Century pursuant to the terms of the Merger (except for the effect of any
     cash received pursuant to dissenters' rights.)
 
          (g) Accounting Treatment.  Bancshares shall have received from Crowe,
     Chizek and Company LLP, a letter dated the Closing Date, in substance
     reasonably acceptable to Bancshares, stating its opinion that based upon
     the information furnished that the transactions contemplated by this
     Agreement should be accounted for by Bancshares as a "pooling of interests"
     for financial statement reporting purposes and that such accounting
     treatment is in accordance with generally accepted accounting principles.
 
     Section 8.3. Conditions to the Obligations of All Parties.  The respective
obligations of Bancshares, Century and CNB to consummate the transactions
contemplated by this Agreement and the Agreement of Merger shall be subject to
the following conditions, except as any of them may waive the same in writing:
 
          (a) Orders, Injunctions, Etc.  No temporary outstanding order,
     preliminary or permanent injunction or other order issued by any court of
     competent jurisdiction or other legal restraint or prohibition preventing
     the consummation of the Merger shall be in effect, nor shall any proceeding
     seeking any of the foregoing be pending.
 
          (b) No Adverse Governmental Action.  On or before the Closing Date, no
     action shall have been taken or threatened by any governmental entity which
     makes consummation of the Merger illegal.
 
                                      A-28
<PAGE>   108
 
          (c) Common Share Registration.  The Bancshares Common Shares into
     which the Century Common Shares are to be converted pursuant to this
     Agreement and shall have been registered with the Securities and Exchange
     Commission and no stop order shall be threatened or in effect with respect
     thereto.
 
          (d) Blue Sky Laws.  Pursuant to Section 7.3 hereof, Bancshares shall
     have filed such registration statements or applications as may be required
     under applicable blue sky laws and such registration statements or
     applications shall have become effective or approved and no stop order
     shall be threatened or in effect with respect thereto.
 
          (e) Shareholder Action.  Prior to the Closing Date, this Agreement
     shall have been approved by the affirmative vote of the holders of a
     majority of the outstanding Century Common Shares and the affirmative vote
     of two-thirds of the outstanding Bancshares Common Shares.
 
          (f) Regulatory Approvals.  All Approvals necessary for the
     consummation of the transactions contemplated by this Agreement shall have
     been obtained and be in force.
 
     Section 8.4. Closing Date.  The closing ("Closing") of the transactions
contemplated by this Agreement shall occur on a date mutually agreed to by
Bancshares and Century as soon as reasonably practicable after satisfaction of
all the conditions set forth in Sections 8.1, 8.2 and 8.3 hereof and the
expiration of all waiting periods imposed by any and all regulatory authorities
(the "Closing Date").
 
                                   ARTICLE IX
 
                          TERMINATION AND ABANDONMENT
 
     Section 9.1. Right to Termination.  This Agreement may be terminated and
the Merger abandoned prior to the Closing Date in the following manner:
 
          (a) Mutual Consent.  By mutual consent of Century and Bancshares,
     authorized by their respective Boards of Directors; or
 
          (b) By Century.  If the Average NMS Closing Price is less than $46.50,
     then Century may terminate this Agreement; or
 
          (c) By Century.  If (i) the Average NMS Closing Price is less than
     $54.25, and (ii) Bancshares' Average NMS Closing Price is more than ten
     (10) percent lower than the average of the NMS Closing Price of an index of
     selected, publicly traded, peer group, commercial banking institutions in
     Ohio, Pennsylvania and West Virginia, then Century may terminate this
     Agreement in accordance with the procedures set forth in Exhibit E hereto.
 
          (d) By Bancshares or Century.  By either Bancshares or Century (i) in
     the event the transactions contemplated by this Agreement are not
     consummated on or before September 30, 1998 or (ii) in the event of a
     material breach by the other party (provided, however, that the terminating
     party is not in material breach of this Agreement), which breach is not
     cured after thirty (30) days written notice hereof to the breaching party.
 
     Section 9.2. Effect of Termination.  If for any reason this Agreement and
the Agreement of Merger shall be terminated and the Merger abandoned as provided
in Section 9.1, this Agreement shall become null and void, without any further
action by the shareholders of either of the parties. In the event of any such
termination, the Directors of Bancshares and Century shall each direct their
officers not to file this Agreement or a certificate or articles of merger, as
the case may be) in the offices of the Secretary of State of the State of Ohio
or the Department of State of the Commonwealth of Pennsylvania, notwithstanding
favorable action by the shareholders of Century and Bancshares. In the event of
any such termination, neither party hereto nor any of its respective
shareholders, directors, or officers shall have any obligation to the other in
damages or for costs, expenses, or otherwise in connection with this Agreement
or the transactions contemplated herein, other than (i) the return to Century,
by Bancshares, of all such copies of Century's records as may have been provided
to Bancshares, under Section 5.2 or other Sections of this Agreement, and the
return to Bancshares, by Century, of all such copies of Bancshares' records as
may have been provided to Century, under Section 5.2 or other Sections of this
                                      A-29
<PAGE>   109
 
Agreement or (ii) with respect to any liabilities or damages incurred or
suffered by a party as the result of a material breach by the other party of
this Agreement pursuant to Section 9.1(d)(ii) hereof.
 
                                   ARTICLE X
 
                                 MISCELLANEOUS
 
     Section 10.1. No Survival of Representations and Warranties.  The
representations and warranties contained in this Agreement and in any
certificate delivered hereunder, other than those contained in Section 2.3
hereof, shall expire on the Closing Date and thereafter neither Bancshares nor
Century shall have any further liability or obligation with respect thereto.
 
     Section 10.2. Representations to the Knowledge of a Party.  Whenever a
representation or warranty is made herein as being "to the knowledge of" a party
hereto or the officers or directors thereof, it is understood that an officer
has made or caused to be made by personnel or representatives competent to
determine the accuracy thereof (and the results thereof reported to him) an
investigation which is appropriate to determine the accuracy of such
representation or warranty.
 
     Section 10.3. Notices.  Any notice required or permitted to be given under
this Agreement shall be in writing and mailed, first class postage prepaid and
addressed as follows:
 
        (a) If to Century:
 
            Joseph N. Tosh, II, President and
            Chief Executive Officer
          Century Financial Corporation
          One Century Place
          Rochester, PA 15074
 
            With copies to:
 
            Stephen W. Johnson
          Buchanan Ingersoll Professional Corporation
          One Oxford Centre
          301 Grant Street
          Pittsburgh, PA 15219-1410
 
        (b) If to Bancshares:
          Citizens Bancshares, Inc.
          10 East Main Street
          Salineville, Ohio 43945
          Attention: Marty E. Adams
 
        With copies to:
 
        M. Patricia Oliver, Esq.
          Squire, Sanders & Dempsey L.L.P.
          4900 Key Tower
          127 Public Square
          Cleveland, Ohio 44114-1304
 
or at such other address or addresses as the party addressed may from time to
time designate in writing. Any such notice shall be deemed given when received.
 
     Section 10.4. Entire Agreement and Modifications.  This Agreement and all
exhibits and schedules attached thereto, together with that certain Stock Option
Agreement dated November 17, 1997 (the "Option Agreement"), constitute the
entire agreement between Bancshares and Century with respect to the subject
matter hereof, and supersede any prior oral or written agreement and any other
written or oral representations, including
 
                                      A-30
<PAGE>   110
 
but not limited to the letter of intent dated November 17, 1997. Each of Century
and Bancshares shall have the right, with the prior consent of the other, from
time to time prior to the Closing Date, to supplement its Disclosure Schedules
with respect to any matter hereafter arising that, if existing or known as of
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedules. This Agreement may be amended only by
instrument in writing executed by the parties hereto and thereto and authorized
as provided herein or therein. Except as provided in Section 10.5, nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any person, firm, or corporation other than the parties
hereto and their respective shareholders any rights or remedies under or by
reason of this Agreement. The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
 
     Section 10.5. Directors' and Officers' Insurance.  After the Effective
Time, Bancshares shall, and shall cause the Surviving Corporation to indemnify,
defend and hold harmless the present and former officers, directors, employees
and agents of Century and CNB (each, an "Indemnified Party") after the Effective
Time against all losses, expenses, claims damages or liabilities arising out of
actions or omissions occurring on or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement) to the full
extent then permitted under Pennsylvania law and by Century's Articles of
Incorporation and Bylaws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any action or suit.
In addition, Bancshares shall maintain Century's existing directors' and
officers' liability insurance (the "D&O Insurance") covering persons who are
currently covered by Century's D&O Insurance for a period of three (3) years
after the Effective Time on terms no less favorable than those in effect on the
date hereof; provided, however, that Bancshares may substitute therefor policies
providing at least comparable coverage containing terms and conditions no less
favorable than those in effect on the date hereof.
 
     Section 10.6. Execution of Counterparts.  For the convenience of the
parties and to facilitate any required filing, this Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same document.
 
     Section 10.7. Expenses.  Except as otherwise provided in the Option
Agreement, the parties hereto each shall bear their own expenses incurred in
connection with this Agreement, including, without limitation, all fees of their
respective legal counsel, financial advisers and accountants.
 
     Section 10.8. Construction.  This Agreement shall be construed and enforced
in accordance with the laws of the State of Ohio.
 
     Section 10.9. Exchange Agent.  Citizens Bancshares, Inc., 10 East Main
Street, Salineville, Ohio, as transfer agent for the Bancshares Common Shares
(or such other bank or trust company as Bancshares selects) shall act as
Exchange Agent in respect of the conversion of Century Common Shares into
Bancshares Common Shares.
 
                                      A-31
<PAGE>   111
 
     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunder duly authorized, all as of the date
first above written.
 
<TABLE>
<S>                                                    <C>
Attest:                                                CITIZENS BANCSHARES, INC.
 
By: /s/ TRACEY L. REEDER                               By: /s/ MARTY E. ADAMS
                                                       -----------------------------------------------------
- -----------------------------------------------------      Marty E. Adams, President and
    Tracey L. Reeder,                                      Chief Executive Officer
    Assistant Secretary
 
Attest:                                                CENTURY FINANCIAL CORPORATION
 
By: /s/ DONALD A. BENZIGER                             By: /s/ DEL E. GOEDEKER
                                                       -----------------------------------------------------
- -----------------------------------------------------      Del E. Goedeker, Chairman
    Donald A. Benziger, Secretary
 
                                                       By: /s/ JOSEPH N. TOSH II
                                                       -----------------------------------------------------
                                                           Joseph N. Tosh II
                                                           President and Chief Executive Officer
</TABLE>
 
                                      A-32
<PAGE>   112
 
                         OMITTED SCHEDULES AND EXHIBITS
 
Disclosure Schedules of Bancshares
Disclosure Schedules of Century
Exhibit A (form of employment agreement)
Exhibit B (form of employment agreement)
Exhibit C (form of employment agreement)
Exhibit D (form of employment agreement)
Exhibit E (Index)
 
     In lieu of filing these schedules and exhibits to the Agreement and Plan of
Merger, the Registrant agrees to furnish supplementally a copy of any such
omitted schedule or exhibit to the Securities and Exchange Commission upon
request.
 
                                      A-33
<PAGE>   113
 
                                   APPENDIX B
 
       DISSENTERS' RIGHTS UNDER SECTION 1701.85 OF THE OHIO REVISED CODE
 
                                       B-1
<PAGE>   114
 
       DISSENTERS' RIGHTS UNDER SECTION 1701.85 OF THE OHIO REVISED CODE
 
1701.85 DISSENTING SHAREHOLDER'S DEMAND FOR FAIR CASH VALUE OF SHARES
 
     (A)(1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.
 
     (2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on the proposal was taken at the meeting of the shareholders,
the dissenting shareholder shall deliver to the corporation a written demand for
payment to him of the fair cash value of the shares as to which he seeks relief,
which demand shall state his address, the number and class of such shares, and
the amount claimed by him as the fair cash value of the shares.
 
     (3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 [1701.80.1] of the Revised Code shall be a
record holder of the shares of the corporation as to which he seeks relief as of
the date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 [1701.80.1] of the Revised Code, the dissenting
shareholder shall deliver to the corporation a written demand for payment with
the same information as that provided for in division (A)(2) of this section.
 
     (4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
entity, whether the demand is served before, on, or after the effective date of
the merger or consolidation.
 
     (5) If the corporation sends to the dissenting shareholder, at the address
specified in his demand, a request for the certificates representing the shares
as to which he seeks relief, the dissenting shareholder, within fifteen days
from the date of the sending of such request, shall deliver to the corporation
the certificates requested so that the corporation may forthwith endorse on them
a legend to the effect that demand for the fair cash value of such shares has
been made. The corporation promptly shall return such endorsed certificates to
the dissenting shareholder. A dissenting shareholder's failure to deliver such
certificates terminates his rights as a dissenting shareholder, at the option of
the corporation, exercised by written notice sent to the dissenting shareholder
within twenty days after the lapse of the fifteen-day period, unless a court for
good cause shown otherwise directs. If shares represented by a certificate on
which such a legend has been endorsed are transferred, each new certificate
issued for them shall bear a similar legend, together with the name of the
original dissenting holder of such shares. Upon receiving a demand for payment
from a dissenting shareholder who is the record holder of uncertificated
securities, the corporation shall make an appropriate notation of the demand for
payment in its shareholder records. If uncertificated shares for which payment
has been demanded are to be transferred, any new certificate issued for the
shares shall bear the legend required for certificated securities as provided in
this paragraph. A transferee of the shares so endorsed, or of uncertificated
securities where such notation has been made, acquires only such rights in the
corporation as the original dissenting holder of such shares had immediately
after the service of a demand for payment of the fair cash value of the shares.
A request under this paragraph by the corporation is not an admission by the
corporation that the shareholder is entitled to relief under this section.
 
     (B) Unless the corporation and the dissenting shareholder have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of the
county in which the principal office of the corporation that issued the shares
is located or was located when the proposal was adopted by the shareholders of
the corporation, or, if the proposal was not required to be
                                       B-2
<PAGE>   115
 
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within that three-month period, may join as plaintiffs or may be
joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts, including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such a complaint is required.
Upon the filing of such a complaint, the court, on motion of the petitioner,
shall enter an order fixing a date for a hearing on the complaint and requiring
that a copy of the complaint and a notice of the filing and of the date for
hearing be given to the respondent or defendant in the manner in which summons
is required to be served or substituted service is required to be made in other
cases. On the day fixed for the hearing on the complaint or any adjournment of
it, the court shall determine from the complaint and from such evidence as is
submitted by either party whether the dissenting shareholder is entitled to be
paid the fair cash value of any shares and, if so, the number and class of such
shares. If the court finds that the dissenting shareholder is so entitled, the
court may appoint one or more persons as appraisers to receive evidence and to
recommend a decision on the amount of the fair cash value. The appraisers have
such power and authority as is specified in the order of their appointment. The
court thereupon shall make a finding as to the fair cash value of a share and
shall render judgment against the corporation for the payment of it, with
interest at such rate and from such date as the court considers equitable. The
costs of the proceeding, including reasonable compensation to the appraisers to
be fixed by the court, shall be assessed or apportioned as the court considers
equitable. The proceeding is a special proceeding and final orders in it may be
vacated, modified, or reversed on appeal pursuant to the Rules of Appellate
Procedure and, to the extent not in conflict with those rules, Chapter 2505 of
the Revised Code. If, during the pendency of any proceeding instituted under
this section, a suit or proceeding is or has been instituted to enjoin or
otherwise to prevent the carrying out of the action as to which the shareholder
has dissented, the proceeding instituted under this section shall be stayed
until the final determination of the other suit or proceeding. Unless any
provision in division (D) of this section is applicable, the fair cash value of
the shares that is agreed upon by the parties or fixed under this section shall
be paid within thirty days after the date of final determination of such value
under this division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a holder
of uncertificated securities entitled to such payment. In the case of holders of
shares represented by certificates, payment shall be made only upon and
simultaneously with the surrender to the corporation of The certificates
representing the shares for which the payment is made.
 
     (C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as of
the day prior to the day on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 [1701.80.1] of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the particular subsidiary corporation.
The fair cash value of a share for the purposes of this section is the amount
that a willing seller who is under no compulsion to sell would be willing to
accept and that a willing buyer who is under no compulsion to purchase would be
willing to pay, but in no event shall the fair cash value of a share exceed the
amount specified in the demand of the particular shareholder. In computing such
fair cash value, any appreciation or depreciation in market value resulting from
the proposal submitted to the directors or to the shareholders shall be
excluded.
 
     (D)(1) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay the
fair cash value of them terminates if any of the following applies:
 
          (a) The dissenting shareholder has not complied with this section,
     unless the corporation by its directors waives such failure;
 
          (b) The corporation abandons the action involved or is finally
     enjoined or prevented from carrying it out, or the shareholders rescind
     their adoption of the action involved;
 
          (c) The dissenting shareholder withdraws his demand, with the consent
     of the corporation by its directors;
 
                                       B-3
<PAGE>   116
 
          (d) The corporation and the dissenting shareholder have not come to an
     agreement as to the fair cash value per share, and neither the shareholder
     nor the corporation has filed or joined in a complaint under division (B)
     of this section within the period provided in that division.
 
     (2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
 
     (E) From the time of the dissenting shareholder's giving of the demand
until either the termination of the rights and obligations arising from it or
the purchase of the shares by the corporation, all other rights accruing from
such shares, including voting and dividend or distribution rights, are
suspended. If during the suspension, any dividend or distribution is paid in
money upon shares of such class or any dividend, distribution, or interest is
paid in money upon any securities issued in extinguishment of or in substitution
for such shares, an amount equal to the dividend, distribution, or interest
which, except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated other
than by the purchase of the shares by the corporation, all rights of the holder
shall be restored and all distributions which, except for the suspension, would
have been made shall be made to the holder of record of the shares at the time
of termination.
 
                                       B-4
<PAGE>   117
 
                                   APPENDIX C
 
              DISSENTERS' RIGHTS UNDER SUBCHAPTER D OF CHAPTER 15
        OF THE PENNSYLVANIA BUSINESS CORPORATION LAW OF 1988, AS AMENDED
 
                                       C-1
<PAGE>   118
 
1571 APPLICATION AND EFFECT OF SUBCHAPTER.
 
     (a) General rule. Except as otherwise provided in subsection (b), any
shareholder of a business corporation shall have the right to dissent from, and
to obtain payment of the fair value of his shares in the event of, any corporate
action, or to otherwise obtain fair value for his shares, where this 1 part
expressly provides that a shareholder shall have the rights and remedies
provided in this subchapter. See:
 
     Section 1906(c) (relating to dissenters rights upon special treatment).
 
     Section 1930 (relating to dissenters rights).
 
     Section 1931(d) (relating to dissenters rights in share exchanges).
 
     Section 1932(c) (relating to dissenters rights in asset transfers).
 
     Section 1952(d) (relating to dissenters rights in division).
 
     Section 1962(c) (relating to dissenters rights in conversion).
 
     Section 2104(b) (relating to procedure).
 
     Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).
 
     Section 2325(b) (relating to minimum vote requirement).
 
     Section 22704(c) (relating to dissenters rights upon election).
 
     Section 2705(d) (relating to dissenters rights upon renewal of election).
 
     Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions).
 
     Section 7104(b)(3) (relating to procedure).
 
     (b) Exceptions.
 
          (1) Except as otherwise provided in paragraph (2), the holders of the
     shares of any class or series of shares that, at the record date fixed to
     determine the shareholders entitled to notice of and to vote at the meeting
     at which a plan specified in any of section 1930, 1931(d), 1932(c) or
     1952(d) is to be voted on, are either:
 
             (i) listed on a national securities exchange; or
 
             (ii) held of record by more than 2,000 shareholders; shall not have
        the right to obtain payment of the fair value of any such shares under
        this subchapter.
 
          (2) Paragraph (1) shall not apply to and dissenters rights shall be
     available without regard to the exception provided in that paragraph in the
     case of:
 
             (i) Shares converted by a plan if the shares are not converted
        solely into shares of the acquiring, surviving, new or other corporation
        or solely into such shares and money in lieu of fractional shares.
 
             (ii) Shares of any preferred or special class unless the articles,
        the plan or the terms of the transaction entitle all shareholders of the
        class to vote thereon and require for the adoption of the plan or the
        effectuation of the transaction the affirmative vote of a majority of
        the votes cast by all shareholders of the class.
 
             (iii) Shares entitled to dissenters rights under section 1906(c)
        (relating to dissenters rights upon special treatment).
 
          (3) The shareholders of a corporation that acquires by purchase,
     lease, exchange or other disposition all or substantially all of the
     shares, property or assets of another corporation by the issuance of
     shares, obligations or otherwise, with or without assuming the liabilities
     of the other corporation and with or without the intervention of another
     corporation or other person, shall not be entitled to the rights and
     remedies of dissenting shareholders provided in this subchapter regardless
     of the fact, if it be the case, that
 
                                       C-2
<PAGE>   119
 
     the acquisition was accomplished by the issuance of voting shares of the
     corporation to be outstanding immediately after the acquisition sufficient
     to elect a majority or more of the directors of the corporation.
 
     (c) Grant of optional dissenters rights. The bylaws or a resolution of the
board of directors may direct that all or a part of the shareholders shall have
dissenters rights in connection with any corporate action or other transaction
that would otherwise not entitle such shareholder to dissenters rights.
 
     (d) Notice of dissenters rights. Unless otherwise provided by statute, if a
proposed corporate action that would give rise to dissenters rights under this
subpart is submitted to a vote at a meeting of shareholders, there shall be
included in or enclosed with the notice of meeting:
 
          (1) A statement of the proposed action and a statement that the
     shareholders have a right to dissent and obtain payment of the fair value
     of their shares by complying with the terms of this subchapter, and
 
          (2) A copy of this subchapter.
 
     (e) Other statutes. The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part that
makes reference to this subchapter for the purpose of granting dissenters
rights.
 
     (f) Certain provisions of articles ineffective. This subchapter may not be
relaxed by any provision of the articles.
 
     (g) Cross references. See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure).
 
     1572 DEFINITIONS.  The following words and phrases when used in this
subchapter shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
 
     "Corporation." The issuer of the shares held or owned by the dissenter
before the corporate action or the successor by merger, consolidation, division,
conversion or otherwise of that issuer. A plan of division may designate which
of the resulting corporations is the successor corporation for the purposes of
this subchapter. The successor corporation in a division shall have sole
responsibility for payments to dissenters and other liabilities under this
subchapter except as otherwise provided in the plan of division.
 
     "Dissenter." A shareholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every act
required up to the time involved for the assertion of those rights.
 
     "Fair value." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects, taking into account all
relevant factors, but excluding any appreciation or depreciation in anticipation
of the corporate action.
 
     "Interest." Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all the
circumstances, taking into account all relevant factors, including the average
rate currently paid by the corporation on its principal bank loans.
 
1573 RECORD AND BENEFICIAL HOLDERS AND OWNERS.
 
     (a) Record holders of shares. A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of the
same class or series beneficially owned by any one person and discloses the name
and address of the person or persons on whose behalf he dissents. In that event,
his rights shall be determined as if the shares as to which he has dissented and
his other shares were registered in the names of different shareholders.
 
     (b) Beneficial owners of shares. A beneficial owner of shares of a business
corporation who is not the record holder may assert dissenters rights with
respect to shares held on his behalf and shall be treated as a dissenting
shareholder under the terms of this subchapter if he submits to the corporation
not later than the time of the assertion of dissenters rights a written consent
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner, whether
or not the shares so owned by him are registered in his name.
                                       C-3
<PAGE>   120
 
     1574 NOTICE OF INTENTION TO DISSENT.  If the proposed corporate action is
submitted to a vote at a meeting of shareholders of a business corporation, any
person who wishes to dissent and obtain payment of the fair value of his shares
must file with the corporation, prior to the vote, a written notice of intention
to demand that he be paid the fair value for his shares if the proposed action
is effectuated, must effect no change in the beneficial ownership of his shares
from the date of such filing continuously through the effective date of the
proposed action and must refrain from voting his shares in approval of such
action. A dissenter who fails in any respect shall not acquire any right to
payment of the fair value of his shares under this subchapter. Neither a proxy
nor a vote against the proposed corporate action shall constitute the written
notice required by this section.
 
1575 NOTICE TO DEMAND PAYMENT.
 
     (a) General rule. If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice of
intention to demand payment of the fair value of their shares and who refrained
from voting in favor of the proposed action. If the proposed corporate action is
to be taken without a vote of shareholders, the corporation shall send to all
shareholders who are entitled to dissent and demand payment of the fair value of
their shares a notice of the adoption of the plan or other corporate action. In
either case the notice shall:
 
          (1) State where and when a demand for payment must be sent and
     certificates for certificated shares must be deposited in order to obtain
     payment.
 
          (2) Inform holders of uncertificated shares to what extent transfer of
     shares will be restricted from the time that demand for payment is
     received.
 
          (3) Supply a form for demanding payment that includes a request for
     certification of the date on which the shareholder, or the person on whose
     behalf the shareholder dissents, acquired beneficial ownership of the
     shares.
 
          (4) Be accompanied by a copy of this subchapter.
 
     (b) Time for receipt of demand for payment. The time set for receipt of the
demand and deposit of certificated shares shall be not less than 30 days from
the mailing of the notice.
 
1576 FAILURE TO COMPLY WITH NOTICE TO DEMAND PAYMENT, ETC.
 
     (a) Effect of failure of shareholder to act. A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by a notice pursuant to section 1575 (relating
to notice to demand payment) shall not have any right under this subchapter to
receive payment of the fair value of his shares.
 
     (b) Restriction on uncertificated shares. If the shares are not represented
by certificates, the business corporation may restrict their transfer from the
time of receipt of demand for payment until effectuation of the proposed
corporate action or the release of restrictions under the terms of section
1577(a) (relating to failure to effectuate corporate action).
 
     (c) Rights retained by shareholder. The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of the
proposed corporate action.
 
1577 RELEASE OF RESTRICTIONS OR PAYMENT FOR SHARES.
 
     (a) Failure to effectuate corporate action. Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall return
any certificates that have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for payment.
 
     (b) Renewal of notice to demand payment. When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.
 
                                       C-4
<PAGE>   121
 
     (c) Payment of fair value of shares. Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the shares, or give written notice that no remittance under
this section will be made. The remittance or notice shall be accompanied by:
 
             (1) The closing balance sheet and statement of income of the issuer
        of the shares held or owned by the dissenter for a fiscal year ending
        not more than 16 months before the date of remittance or notice together
        with the latest available interim financial statements.
 
             (2) A statement of the corporation's estimate of the fair value of
        the shares.
 
             (3) A notice of the right of the dissenter to demand payment or
        supplemental payment, as the case may be, accompanied by a copy of this
        subchapter.
 
     (d) Failure to make payment. If the corporation does not remit the amount
of its estimate of the fair value of the shares as provided by subsection (c),
it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such certificate
or on the records of the corporation relating to any such uncertificated shares
that such demand has been made. If shares with respect to which notation has
been so made shall be transferred, each new certificate issued therefor or the
records relating to any transferred uncertificated shares shall bear a similar
notation, together with the name of the original dissenting holder or owner of
such shares. A transferee of such shares shall not acquire by such transfer any
rights in the corporation other than those that the original dissenter had after
making demand for payment of their fair value.
 
1578 ESTIMATE BY DISSENTER OF FAIR VALUE OF SHARES.
 
     (a) General rule. If the business corporation gives notice of its estimate
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as permitted
by section 1577(c) relating to payment of fair value of shares) and the
dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the fair
value of the shares, which shall be deemed a demand for payment of the amount or
the deficiency.
 
     (b) Effect of failure to file estimate. Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the corporation.
 
1579 VALUATION PROCEEDINGS GENERALLY.
 
     (a) General rule. Within 60 days after the latest of:
 
          (1) Effectuation of the proposed corporate action;
 
          (2) Timely receipt of any demands for payment under section 1575
     (relating to notice to demand payment); or
 
          (3) Timely receipt of any estimates pursuant to section 1578 (relating
     to estimate by dissenter of fair value of shares);
 
If any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.
 
     (b) Mandatory joinder of dissenters. All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served on
each such dissenter. If a dissenter is a nonresident, the copy may be served on
him in the manner provided or prescribed by or pursuant to 42 Pa.C.S. Ch. 53
(relating to bases of jurisdiction and interstate and international procedure).
 
                                       C-5
<PAGE>   122
 
     (c) Jurisdiction of the court. The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority as may be specified in the order of appointment or in
any amendment thereof.
 
     (d) Measure of recovery. Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found to
exceed the amount, if any, previously remitted, plus interest.
 
     (e) Effect of corporation's failure to file application. If the corporation
fails to file an application as provided in subsection (a), any dissenter who
made a demand and who has not already settled his claim against the corporation
may do so in the name of the corporation at any time within 30 days after the
expiration of the 60-day period. If a dissenter does not file an application
within the 30-day period, each dissenter entitled to file an application shall
be paid the corporation's estimate of the fair value of the shares and no more,
and may bring an action to recover any amount not previously remitted.
 
1580 COSTS AND EXPENSES OF VALUATION PROCEEDINGS.
 
     (a) General rule. The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.
 
     (b) Assessment of counsel fees and expert fees where lack of good faith
appears. Fees and expenses of counsel and of experts for the respective parties
may be assessed as the court deems appropriate against the corporation and in
favor of any or all dissenters if the corporation failed to comply substantially
with the requirements of this subchapter and may be assessed against either the
corporation or a dissenter, in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted in bad faith or
in a dilatory, obdurate, arbitrary or vexatious manner in respect to the rights
provided by this subchapter.
 
     (c) Award of fees for benefits to other dissenters. If the court finds that
the services of counsel for any dissenter were of substantial benefit to other
dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefitted.
 
                                       C-6
<PAGE>   123
 
                                   APPENDIX D
 
                 FAIRNESS OPINION OF DANIELSON ASSOCIATES, INC.
 
                                       D-1
<PAGE>   124
 
                                    CENTURY
                            ROCHESTER, PENNSYLVANIA
                                FAIRNESS OPINION
                            AS OF NOVEMBER 17, 1997
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Introduction................................................    D-3
 
Description.................................................    D-4
 
Financial Performance.......................................    D-5
 
Acquisition Pricing.........................................    D-9
 
Market Value Adjustments....................................   D-14
 
Citizens....................................................   D-15
 
Valuation...................................................   D-23
 
                            APPENDICES
      (Not included in the Joint Proxy Statement/Prospectus)
 
                                                                TAB
                                                              -----
 
Century 1996 Annual Report..................................      I
 
Century Third Quarter 1997 Report...........................     II
 
Citizens 1996 Annual Report.................................    III
 
Citizens Third Quarter 1997 Report..........................     IV
</TABLE>
 
                                       D-2
<PAGE>   125
 
                                    CENTURY
                            ROCHESTER, PENNSYLVANIA
 
                                FAIRNESS OPINION
 
                            AS OF NOVEMBER 17, 1997
 
     Set forth herein is Danielson Associates Inc.'s ("Danielson Associates")
independent opinion as to the "fairness" of the offer by Citizens Bancshares,
Inc. ("Citizens") of Salineville, Ohio to acquire all of the outstanding common
stock of Century Financial Corporation ("Century" or the "Bank") of Rochester,
Pennsylvania through an exchange of stock with a value at the time of the offer
of about $137.8 million. The "fair" sale value is defined as the price at which
all of the shares of Century's common stock would change hands between a willing
seller and a willing buyer, each having reasonable knowledge of the relevant
facts. In opining to the "fairness" of the offer, it also had to be determined
if the Citizens common stock to be exchanged for Century common stock was
"fairly" valued.
 
     In preparing the opinion, the markets served by Century have been analyzed;
its business and future prospects have been reviewed; its financial performance
has been compared with banks in the region; and the acquisition prices of
comparable banks have been analyzed. In addition, any unique characteristics
have been considered.
 
     This opinion is based on data supplied by Century, and relies on some
public information, all of which is believed to be reliable, but the accuracy or
the completeness of such information cannot be guaranteed. The opinion assumes
that there are no significant loan problems beyond what was stated in recent
reports to regulatory agencies.
 
     In determining the "fair" sale value of Century, the emphasis has been on
prices paid for banks and bank holding companies with similar financial,
structural and market characteristics. These sale prices were then related to
earnings, and equity capital, also referred to as "book."
 
     In determining the "fairness" of the offer, we compared the common stock to
be exchanged by Citizens for Century common stock with the common stock of
other, similar bank holding companies. In so doing, we also compared Citizens'
financial performance with these comparable financial institutions.
 
     Based on the foregoing, we are of the opinion on the date hereof that the
offer made by Citizens to acquire all of the common stock of Century pursuant to
the merger agreement is "fair" from a financial point of view to Century and its
shareholders.
 
                                          Respectfully submitted,
 
                                          Arnold G. Danielson
                                          Chairman
                                          Danielson Associates Inc.
 
                                       D-3
<PAGE>   126
 
                                  DESCRIPTION
 
GENERAL
 
     Century is a Pennsylvania business corporation organized in July 1987 as a
bank holding company whose only subsidiary is Century National Bank and Trust
Company (also "Century" and the "Bank"), which also is based in Rochester,
Pennsylvania. The Bank was a product of several mergers involving
long-established community banks. Its most recent acquisitions were of the First
National Bank of Midland and National Bank of Beaver County in 1985. These
acquisitions doubled the Bank's size and took it beyond Beaver County into the
busy retailing area in Cranberry Township in Butler County.
 
     Century, the Holding Company, is subject to regulation by the Board of
Governors of the Federal Reserve System, and its subsidiary bank is regulated by
the Pennsylvania Department of Banking. The Bank's deposits are insured by the
Federal Deposit Insurance Corporation ("FDIC").
 
     Century offers a wide range of banking services through twelve banking
offices in Beaver County and one in Butler County. These services include among
others, checking, savings and time deposits; residential and commercial
mortgages; commercial and consumer loans; and trust services. The Bank also
invests deposits and borrowed money in a variety or securities.
 
MARKET
 
     The market served by Century is primarily Beaver County, but it does
business throughout the Pittsburgh metropolitan area. In particular, it does
considerable business in southwest Butler County, where it has a branch, and in
western Allegheny County.
 
     Beaver County, in which Century does most of its business, has seen better
days and has been losing population in recent years. In the eighties, it had a
population overflow of about 20,000, or .9% per annum. Most of the decline is
attributable to the diminished importance of the steel industry that once had
dominated the area. The county's median household income of $24,782 as of 1995
was about $6,000 below the statewide average.
 
                      SELECTED DEMOGRAPHICS ON HOME MARKET
 
<TABLE>
<CAPTION>
                     POPULATION
              -------------------------    MEDIAN
                              ANNUAL      HOUSEHOLD
   COUNTY        1990      GROWTH RATE*   INCOME**
   ------     ----------   ------------   ---------
<S>           <C>          <C>            <C>
Beaver***        186,093       (.9)%       $24,782
Butler           152,013        .3         $30,092
Pennsylvania  11,881,643        --         $30,790
</TABLE>
 
- ---------------
 
  * 1980 to 1990.
 
 ** 1995.
 
*** Accounts for 97% of Century's business.
 
Source: Sourcebook America, CACI, Arlington, Virginia and 1990 Census of
        Population and Housing, Bureau of the Census, Washington, D.C.
 
     Neighboring Butler County, in which Century also has a presence, has much
better dynamics than Beaver. Its population increased in the eighties, and it is
believed to still be increasing, particularly in the southwest sector where
Century has an office. Butler's median household income is only marginally below
the Pennsylvania average.
 
     Mellon Bank Corporation ("Mellon") has been the historic banking leader in
Beaver County, but Century has been gaining ground rapidly in recent years. In
1990, Mellon held 23.7% of the county's deposits, which was about twice
Century's share. Between 1990 and 1996, Century narrowed the gap from about
twelve percentage points to just three. If these trends continue, Century would
be number one in deposit share as early as 1998.
 
                                       D-4
<PAGE>   127
 
     The other commercial banks with major positions in Beaver County are First
Western Bancorp, Inc. ("First Western") and National City Corporation ("National
City"). As of June 30, 1996, they had deposit shares in the 12% to 13% range.
Having lesser positions, but still significant factors, are F.N.B. Corporation
("F.N.B.") and PNC Bank Corp. ("PNC").
 
                          BEAVER COUNTY DEPOSIT SHARE
 
<TABLE>
<CAPTION>
                                                                  MARKET SHARE
                                                                -----------------
                                       DEPOSITS     JUNE 30,             JUNE 30,
                                        1997*        1997*      1996       1994      1992     1990
                                      ----------    --------    -----    --------    -----    -----
                                      (IN MILL.)
<S>                                   <C>           <C>         <C>      <C>         <C>      <C>
MARKET LEADERS
  Mellon............................    $  368        17.9%      18.8%     19.9%      21.8%    23.7%
  Century...........................       347**      16.8       15.7      14.3       12.1     11.8
  First Western.....................       263        12.8       13.4      13.5       13.0      9.1
  National City***..................       252        12.2       12.5      12.9        5.1      5.3
                                        ------       -----      -----     -----      -----    -----
     Subtotal.......................     1,230        59.7       60.4      60.6       52.0     49.9
                                        ------       -----      -----     -----      -----    -----
SECOND TIER
  Peoples Home......................       162         7.9        7.8       7.5        7.4      7.8
  ESB...............................       121         5.9        5.9       6.0         .6       .5
  F.N.B.............................       118         5.7        5.6       5.7        5.7      6.5
  PNC...............................        92         4.5        4.7       4.7        4.9       --
                                        ------       -----      -----     -----      -----    -----
     Subtotal.......................       493        24.0       24.0      23.9       18.6     14.8
                                        ------       -----      -----     -----      -----    -----
Other Thrifts.......................        54         2.6        2.7       2.8        8.4     15.5
Other Bank..........................        11          .6         .5        .5       10.2      9.9
Credit Unions.......................       270        13.1       12.4      12.2       10.8      9.9
                                        ------       -----      -----     -----      -----    -----
     Total..........................    $2,058       100.0%     100.0%    100.0%     100.0%   100.0%
                                        ======       =====      =====     =====      =====    =====
</TABLE>
 
- ---------------
 
  * Assumes continuation of 1995-96 trend.
 ** Actual.
*** Integra as a continuing factor.
Source: SNL Securities L.P., Charlottesville, Virginia and internal reports.
 
     Also having substantial shares, albeit much smaller than the county's "big
four," are two thrifts, Peoples Home Savings Bank ("Peoples Home") and ESB Bank,
FSB ("ESB"). Together, they held almost 12% of the county's deposits in
mid-1996.
 
     Credit unions also are substantial competitors in Beaver County. They have
been gaining deposit share steadily during the nineties and had a collective
13.1% deposit share in 1996.
 
                             FINANCIAL PERFORMANCE
 
     Century has exhibited growth and earnings that belie the poor dynamics of
its home market. After nearly doubling its size in 1985 by acquisition, the Bank
grew slowly from 1986 through 1991, but since then its growth has been rapid.
Assets increased 8.3% per annum between 1991 and 1997, and since 1994, the
increase was 11.1% annually.
 
                                       D-5
<PAGE>   128
 
                          CENTURY'S FINANCIAL HISTORY
 
<TABLE>
<CAPTION>
                                                PERCENT OF ASSETS
                                         -------------------------------
                  TANGIBLE       NET     TANGIBLE    NET      RETURN ON
       ASSETS      CAPITAL      INCOME   CAPITAL    INCOME   AVG. EQUITY
       ------   -------------   ------   --------   ------   -----------
                (IN MILLIONS)
<S>    <C>      <C>             <C>      <C>        <C>      <C>
1997*   $459        $36.7        $5.4      8.00%     1.26%      15.34%
1996     413         33.9         4.9      8.21      1.26       15.00
1995     376         31.6         4.3      8.36      1.18       14.48
1994     332         27.5         3.7      8.28      1.14       13.70
1993     318         25.5         3.3      8.04      1.07       13.37
1992     306         23.5         3.2      7.72      1.10       14.27
1991     279         21.5         2.9      7.73      1.07       14.09
1990     266         19.5         2.7      7.36      1.06       14.19
1989     243         17.7         2.4      7.29      1.04       13.81
1988     218         15.9         2.0      7.34       .94       12.46
1987     205         14.1         1.8      6.90       .77       12.38
1986     202         13.9         1.3      6.89       .64        9.37
</TABLE>
 
- ---------------
 
* September 30, 1997 or nine months annualized.
 
Source: Sheshunoff Information Services, Inc., Austin, Texas and SNL Securities
L.P., Charlottesville, Virginia.
 
     While assets growth accelerated in the last three years, earnings also
showed strong improvement. Net income that was between 1% and 1.10% of average
assets from 1989 through 1993 rose to 1.14% in 1994, 1.18% in 1995, 1.26% in
1996 and stayed at that level through the first nine months of 1997. In 1997,
Century's return on average equity was 15%.
 
     Century has managed its capital well with an assist from its rapid growth.
Capital as a percent of assets went above 8% in 1993 and appeared to be headed
toward excess, but as of September 30, 1997, capital was 8.00% of assets. This
is more than adequate capitalization, but not so high that a good return on
equity is difficult.
 
     The improved earnings in the most recent years have been primarily the
result of reductions in net operating expense, some of which was the virtual
elimination of deposit insurance. Century's net operating expense has fallen
from 2.77% in 1994 to 2.25% through the first nine months of 1997. This more
than offset the margin slippage in 1997 as net interest income fell from the
4.32% of average assets that had been typical of the preceding years to 4.03%.
 
                      CENTURY'S INCOME AND EXPENSE CHANGE
 
<TABLE>
<CAPTION>
                      PERCENT OF AVERAGE ASSETS
        -----------------------------------------------------
        NET INT.   NET OPER.   NET OPER.   CONTR. TO    NET
         INCOME    EXPENSE*     INCOME     RESERVES    INCOME
        --------   ---------   ---------   ---------   ------
<S>     <C>        <C>         <C>         <C>         <C>
1997**    4.03%      2.25%       1.78%        .20%      1.26%
1996      4.32       2.55        1.77         .17       1.26
1995      4.15       2.52        1.63         .07       1.18
1994      4.33       2.77        1.56         .08       1.14
1993      4.26       2.77        1.49         .20       1.07
1992      4.37       2.73        1.64         .26       1.10
1991      4.37       2.76        1.61         .21       1.07
1990      4.40       2.79        1.61         .23       1.06
</TABLE>
 
- ---------------
 
 * Operating expense less noninterest income.
 
** Nine months annualized.
 
Source: Sheshunoff Information Services, Inc., Austin, Texas and SNL Securities
L.P., Charlottesville, Virginia.
 
                                       D-6
<PAGE>   129
 
     In 1994 and 1995, Century's earnings were helped by greatly reduced
contributions to reserves, but in 1996 and 1997, Century's contributions were
similar to the early nineties. Through the first nine months of 1997, Century's
contribution to reserves was .20% of average assets.
 
     When compared with similar banks in Western Pennsylvania, Century had a
modest negative variance in net operating income in 1997. The primary reason was
interest expense that was about 50 basis points higher. This was more than
offset by interest income as a percent of average assets, but it also was 14
basis points higher in net operating expense.
 
                         INCOME AND EXPENSE COMPARISON*
 
<TABLE>
<CAPTION>
                                                             PERCENT OF AVERAGE ASSETS
                                             ---------------------------------------------------------
                                             INTEREST    NET OPER.     TOTAL     INTEREST    NET OPER.
                                             EXPENSE      EXPENSE     EXPENSE     INCOME      INCOME
                                             --------    ---------    -------    --------    ---------
<S>                                          <C>         <C>          <C>        <C>         <C>
Century....................................    3.70%       2.43%       6.13%       7.89%       1.76%
Comparable Banks**.........................    3.19%       2.29%       5.48%       7.34%       1.86%
Large Banks***.............................    3.32        1.07        4.39        6.98        2.59
</TABLE>
 
- ---------------
 
  * Twelve months ending September 30, 1997 for Century and twelve months ended
    June 30, 1997 for the others.
 
 ** Citizens National Bank of Evans City, First Western Bank, Mars National Bank
    and Reeves Bank in this and subsequent tables.
 
*** Mellon, National City and PNC in this and subsequent tables.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     When contrasted to the big banks in the region -- Mellon, National City and
PNC -- the comparison is not quite as good. Century had almost a full percentage
point advantage relative to the large banks in interest income as a percent of
average assets in 1997, but it gave this away, primarily through net operating
expense that was almost twice that of the large banks. The end result was an 83
basis point negative differential in net operating income.
 
     The key margin determinants explain Century's income and expense variances
with the comparable banks. On the loan side, it had 77% of its assets committed
to loans compared to 66% for the comparable banks, and it had a slightly higher
yield on these loans. On the deposit side, Century has fewer transaction
deposits, 40% of assets to 46% for the comparable banks, and a much higher
average rate paid on interest-bearing deposits, 4.57% to 3.96%.
 
                    SELECTED MARGIN DETERMINANT COMPARISONS*
 
<TABLE>
<CAPTION>
                                                         PERCENT OF ASSETS      YIELD OR RATE PAID
                                                        -------------------    ---------------------
                                                        TOTAL      TRANS.               INT.-BEARING
                                                        LOANS    DEPOSITS**    LOANS      DEPOSITS
                                                        -----    ----------    -----    ------------
<S>                                                     <C>      <C>           <C>      <C>
Century...............................................   77%         40%       8.80%        4.57%
Comparable Banks......................................   66          46        8.64         3.96
Large Banks...........................................   71          43        8.30         4.10
</TABLE>
 
- ---------------
 
 * June 30, 1997 or Twelve Months Ending on June 30, 1997.
 
** Includes regular savings.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     Loans and deposits as a percent of assets are not that different for
Century than for the large banks, and its yield and rate paid relationships are
generally offsetting in this comparison. The big banks had an average rate
 
                                       D-7
<PAGE>   130
 
paid on interest-bearing deposits that was 47 basis points less than Century in
1997 while Century has a 50 basis point advantage in average loan yield.
 
     When deposits and loans are segregated into their major categories, Century
is similar to the comparable banks other than being generally more committed to
lending. If there is a major difference in loans, it is that more of Century's
commercial loans are secured by something other than real estate than is the
case for the comparable banks. On the deposit side, Century has slightly fewer
noninterest-bearing and other transaction deposits relative to assets.
 
     In its loan mix, Century is actually more like the large banks that its
comparable brethren. They, too, have far fewer commercial loans secured by real
estate than the comparable banks.
 
                        LOAN AND DEPOSIT MIX COMPARISON*
 
<TABLE>
<CAPTION>
                                                               PERCENT OF ASSETS
                                            --------------------------------------------------------
                                                                     LOANS
                                            --------------------------------------------------------
                                                           COMM.
                                            RES. MTGE.      R.E.        COMM.      CONSUMER    TOTAL
                                            ----------     -----        -----      --------    -----
<S>                                         <C>           <C>         <C>          <C>         <C>
Century...................................      26%           8%         23%          20%       77%
Comparable Banks..........................      24           18          10           14        66
Large Banks...............................      20            7          29           15        71
</TABLE>
 
<TABLE>
<CAPTION>
                                                                    DEPOSITS
                                            --------------------------------------------------------
                                                           OTHER                    JUMBO
                                              DEMAND      TRANS.**    CONS. CDS      CDS       TOTAL
                                              ------      --------    ---------     -----      -----
<S>                                         <C>           <C>         <C>          <C>         <C>
Century...................................      10%          30%         41%           5%       86%
Comparable Banks..........................      13           33          34            6        86
Large Banks...............................      14           29          18            7        68
</TABLE>
 
- ---------------
 
 * June 30, 1997.
 
** Includes regular savings.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     In liabilities, the big banks differ substantially from Century and the
comparable banks in that they have become far less dependent on deposits for
funding. They have as many, or more, transaction accounts as the smaller banks,
but they are using borrowings as much as certificates of deposits ("CDs") for
high cost funding.
 
     Despite being so heavily committed to loans, Century has not had serious
loan quality problems. It has never had nonperforming assets ("NPAs") account
for more than .80% of all assets. As of September 30, 1997, the Bank's NPAs were
 .65% of assets.
 
                                       D-8
<PAGE>   131
 
                           CAPITAL AND ASSET QUALITY*
 
<TABLE>
<CAPTION>
                                                     PERCENT OF ASSETS
                                                ----------------------------                  NPAS/
                                                TANGIBLE                        RESERVES/    PRIMARY
                                                CAPITAL     RESERVES    NPAS      LOANS      CAPITAL
                                                --------    --------    ----    ---------    -------
<S>                                             <C>         <C>         <C>     <C>          <C>
CENTURY
1997
  Sept. 30....................................    8.00%        .75%     .65%       .97%         7%
  June 30.....................................    8.30         .79      .75       1.02          8
  March 31....................................    8.25         .79      .65       1.04          7
  1996........................................    8.21         .78      .27       1.05          3
  1995........................................    8.38         .80      .31       1.17          3
  1994........................................    8.28         .97      .57       1.36          6
  1993........................................    8.04         .97      .25       1.51          3
  1992........................................    7.72         .81      .48       1.25          6
  1991........................................    7.73         .65      .53        .97          6
  1990........................................    7.36         .70      .59       1.04          7
Comparable Banks..............................    5.23         .79      .56       1.21          6
Large Banks...................................    5.31        1.38      .70       1.94         12
</TABLE>
 
- ---------------
 
* June 30, 1997 unless otherwise stated.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     With asset quality not being a problem, Century has allowed reserves to
decline as a percent of loans since the recessionary early nineties when they
reached as high as 1.51% of loans. In 1996 and 1997, reserves have been about 1%
of loans, which is more than adequate considering the good asset quality and
capital at 8% of assets.
 
     What do all these numbers say about Century? They describe a mid-sized bank
that has been growing rapidly and improving earnings while doing so. It has good
asset quality, a diversified loan portfolio and is well-capitalized. If there is
a downside, it is that there is not a lot of room for margin and cost
improvements, and future growth is tied to continuing the good growth, which
could be difficult in a low growth environment.
 
                              ACQUISITION PRICING
 
     The "fair" sale value of Century, or any banking organization, is usually
determined by the marketplace through the prices being paid for similar banks or
bank holding companies. Since no two banks are exactly the same, though, there
are always comparability problems. Valuations also can be complicated by either
a sudden change in economic or market conditions or by limited acquisition
activity.
 
     The sharp decline in stock prices in late 1987 and deterioration of asset
quality in the early nineties are examples of events that radically changed bank
acquisition pricing. In each case, the stock prices of large acquirers were
adversely impacted, and their ability to pay up to the sellers' expectations was
constrained.
 
     Another method of valuation, and an important form of measurement when
there are few applicable comparisons, is to calculate the value based on
discounted future earnings or dividends. This best indicates what a buyer can
afford when paying cash rather than exchanging a stock that has a value well in
excess of book, but it is a benchmark for stock transactions as well. Like all
statistical projections, though, discounting future earnings or dividends is
only as accurate as the assumptions used, and they can result in prices
significantly different from the realities of the marketplace.
 
                                       D-9
<PAGE>   132
 
REGIONAL BANK PRICING
 
     Bank acquisition pricing in Pennsylvania and neighboring states has been
very cyclical and has followed the market relative to the pricing of bank
stocks. When bank stocks traded at high multiples of earnings and book, then the
prices paid for banks also were high.
 
     Thus, when bank stocks were at record levels in 1987, acquisition prices
peaked in Century's extended region -- Kentucky, Maryland, Ohio, West Virginia
and Pennsylvania -- with a median price of 252% of book and 15.9 times earnings
for banks with assets in excess of $100 million. When bank stocks went out of
favor after 1987, acquisition pricing drifted down to median offers of 154% of
book and 12 times earnings by 1991.
 
                           CENTURY'S EXTENDED REGION*
                        BANK MERGER ACTIVITY AND PRICING
 
<TABLE>
<CAPTION>
                                     MEDIAN PRICE
                               ------------------------
                                           PERCENT OF
                     DEAL       TIMES     -------------
         NUMBER     VALUE      EARNINGS   BOOK   ASSETS
         ------   ----------   --------   ----   ------
                  (IN MILL.)
<S>      <C>      <C>          <C>        <C>    <C>
1997**     11       $2,189       22.0     271%    23.7%
1996       11        1,610       20.0     201     20.2
1995       11        5,573       18.0     199     16.2
1994       12          908       17.0     213     18.8
1993       20        8,432       17.2     196     17.1
1992       13        1,725       15.0     178     14.2
1991       12        2,177       12.0     154     11.6
1990        6          187       13.9     147     11.7
1989***    11        2,188       13.2     204     18.3
1988        7          226       15.4     200     13.5
1987       12        2,576       15.9     252     17.5
1986       12        1,398       14.9     199     17.1
1985       13        1,419       14.3     163      9.9
1984       15          477        9.1     146     10.7
1983       15          560       13.3     146     10.4
</TABLE>
 
- ---------------
 
  * Acquiree assets over $100 million in Kentucky, Maryland, Ohio, Pennsylvania
    and West Virginia.
 
  * Through November 17, 1997.
 
*** Excludes Kentucky prior to 1990.
 
Source: SNL Securities L.P., Charlottesville, Virginia and Danielson Associates'
compilations.
 
     Since that low point, bank acquisition prices have moved up steadily, and
the median went above 190% of book and 17 times earnings in 1993. Pricing was
fairly steady relative to book from 1993 through 1996, but the multiples of
earnings paid climbed sharply to 20 times earnings in 1996. In 1997, pricing
continued to rise with the median value being 22 times earnings, 271% of book
and almost 24% of assets.
 
     The median price times earnings of bank sales nationwide for acquirees with
assets between $100 million and $5 billion in 1997, except in California, which
has its own dynamics because of its late emergence from the recession, has
increased in every month. The increases between late spring and October were
particularly large relative to both earnings and book.
 
                                      D-10
<PAGE>   133
 
                    SUMMARY OF 1997 MID-SIZED BANK PRICING*
 
<TABLE>
<CAPTION>
                                                        MEDIAN PRICE
                                                 --------------------------
                                                            AS A PERCENT OF
                                        NO. OF    TIMES     ---------------   STOCK
                                        DEALS    EARNINGS   BOOK    ASSETS    PE**
                                        ------   --------   -----   -------   -----
<S>                                     <C>      <C>        <C>     <C>       <C>
October..............................      7       27.1X     289%     24.1%    18.3X
September............................      5       26.5      297      22.8     18.3
August...............................      9       20.7      268      20.6     16.6
July.................................      7       21.9      265      21.5     17.0
June.................................      7       21.0      247      24.3     16.2
May..................................      7       17.8      222      21.9     15.2
April................................      1       15.8      175      15.3     14.6
March................................      6       15.7      217      18.7     14.8
February.............................     10       14.8      222      19.6     15.3
January..............................      3       14.0      226      19.9     14.6
</TABLE>
 
- ---------------
 
 * Acquiree assets between $100 million and $5 billion nationwide excluding
California.
 
** National median for bank stock prices.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     After modest gains from January through April when the median price times
earnings was below 1996 levels, the median price rose to 17.8 times earnings in
May; in June it was 21 times earnings; and by September it was 26.5 times
earnings. Corresponding percentages of book in those three months were 222%,
247% and 297%. In October, the median prices paid for banks of this size were
27.1 times earnings and 289% of book.
 
     Changes in acquisition pricing usually reflect the stock prices of the
acquirers, and this relationship can be seen in 1997. From January through
April, the median bank stock price as a multiple of earnings was generally
between 14 and 15 times earnings. In May, the national median bank stock was
selling at 15.2 times earnings. In June, it was 17 times earnings, and by
September and October, the median had reached 18.3 times earnings after dipping
slightly in August.
 
     The most applicable recent transactions to the sale value of Century were
Fulton Financial Corporation ("Fulton") buying Keystone Heritage Group, Inc.
("Keystone Heritage"); FirstMerit Corporation ("FirstMerit") purchasing
CoBancorp, Inc. ("CoBancorp"); WesBanco, Inc. ("WesBanco") acquiring Commercial
Bancshares, Inc. ("Commercial"); and, earlier in the year, Area Bancshares
Corporation's ("Area") purchase of Cardinal Bancshares, Inc. ("Cardinal"). Three
of these acquirees received more than 20 times earnings, and Keystone Heritage
was paid over 300% of book.
 
                      MOST APPLICABLE RECENT TRANSACTIONS
 
<TABLE>
<CAPTION>
                                                                           PRICE
                                                                  -----------------------
                                                                             PERCENT OF
                                                       OFFER       TIMES    -------------
                                                       PRICE      EARNINGS  BOOK   ASSETS
                                                     ----------   --------  ----   ------
                                                     (IN MILL.)
<S>                                                  <C>          <C>       <C>    <C>
Fulton-Keystone Heritage...........................     $212         20.8X   319    33.4%
FirstMerit-CoBancorp...............................      157          21.4   271    24.0
WesBanco-Commercial................................      136          25.9   297    30.2
Area-Cardinal......................................      105          16.9   188    16.6
  Median...........................................       --          21.1   284    27.1
</TABLE>
 
- ---------------
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
                                      D-11
<PAGE>   134
 
     Not every bank, though, gets that high a price as Cardinal was paid only
16.9 times earnings and 188% of book. Some, but not all, of this may be
attributable to this merger occurring earlier in the year than the others.
 
     These and other deals would suggest the present sale value of quality banks
of Century's size is at least 21 to 23 times earnings and 260% to 300% of book.
Applying the mid-points to Century results in an unadjusted sale value of $118
million, or $23.25 per share, based on earnings and $102.7 million, or $20.24
per share, using book value.
 
                       RECENT PRICING APPLIED TO CENTURY
 
<TABLE>
<CAPTION>
                                                                         PRICE
                                                              ---------------------------
                                                                             PERCENT OF
                                                                 TIMES      -------------
                                                               EARNINGS     BOOK   ASSETS
                                                              -----------   ----   ------
                                                              (IN MILL.)
<S>                                                           <C>           <C>    <C>
High........................................................       24X       300%    27%
Mid-Point...................................................       22        280     25
Low.........................................................       20        260     23
</TABLE>
 
<TABLE>
<CAPTION>
                                                               APPLIED TO CENTURY*
                                                            --------------------------
<S>                                                         <C>      <C>       <C>
High (in millions)........................................  $128.7   $ 110.0   $ 123.8
- -- Per share..............................................   25.37     21.68     24.40
Mid-Point (in millions)...................................   118.0     102.7     114.7
- -- Per share..............................................   23.25     20.24     22.60
Low (in millions).........................................   107.2      95.4     105.5
- -- Per share..............................................   21.14     18.79     20.79
</TABLE>
 
- ---------------
 
* September 30, 1997 or twelve months ending September 30, 1997 and Century
  results assume 5,074,720 shares outstanding.
 
     This pricing is extremely volatile as it reflects a generous investor view
of acquiring bank stock prices and the willingness of an acquirer in a specific
market having and willing to use a high stock price to buy a bank like Century.
This had not yet happened in Western Pennsylvania.
 
INVESTMENT VALUATION
 
     Since acquisitions based on comparable sale prices include a number of
variables such as the acquirer's stock price, capital of the acquiree, asset
quality and the condition of the equity markets, they may not reflect the true
long-term value to the acquirer. Thus, sale valuations also should consider the
value based on the expected return on the investment absent the benefit of a
stock with a high multiple. Two of the most widely used methods for doing this
are discounted future earnings and dividends.
 
     A common method of determining investment value is the discounted future
earnings. In applying discounted future earnings to Century, several variables
were used relative to growth, earnings and acceptable returns on investments.
Annual asset growth was calculated at 8%; the return on average assets at 1.30%,
1.20% and 1.10%; and the discount rates utilized were 11%, 13% and 15%.
 
     The discount rate is an approximate equivalent to the return desired on the
initial investment. In other words, a discount rate of 13% is about a 13% return
on the initial investment.
 
     Century has had strong growth recently, and earnings have been in the
vicinity of 1.20% of average assets range. An 8% asset growth and 1.20% return
on average assets should be sustainable.
 
                                      D-12
<PAGE>   135
 
              CENTURY'S VALUE BASED ON DISCOUNTED FUTURE EARNINGS
 
<TABLE>
<CAPTION>
                                                                     VALUE
                                                            ------------------------
                                                                 DISCOUNT RATE*
                                                            ------------------------
                                                             11%       13%      15%
                                                            ------    -----    -----
                                                                 (IN MILLIONS)
<S>                                                         <C>       <C>      <C>
8% ASSET GROWTH
  RETURN ON AVERAGE ASSETS
     1.30................................................   $120.3    $95.7    $78.0
     1.20................................................    111.1     88.3     72.0
     1.10................................................     98.0     77.9     63.6
</TABLE>
 
- ---------------
 
* The rate of return of a cash investment calculated over a 30 year period.
 
     Using an 8% rate of asset growth and a 1.20% return on average assets,
which approximates expectations, the investment value at a discount rate of 13%
is $88.3 million. At an 11% discount rate, the investment value would be $111.1
million. These values translate, respectively, into 241% and 303% of book. In
our analysis, we have determined these are appropriate discount rates in this
environment for large bank acquisitions. This projection, however, determines
value based on a stand-alone basis and has not factored in the cost savings of a
merger.
 
     Similar in approach to discounted future earnings is discounted dividend
analysis, which discounts dividends to shareholders based on the theoretical
approach that it is cash put into the hands of shareholders that really counts.
This approach assumes that all excess earnings are returned to the shareholders
as dividends for a set period of time and then the shares are sold at market
value.
 
     The key difference between this approach and discounted future earnings is
that retained earnings are not valued until the termination of the models
forecast, which means investments that do not produce sufficient returns as
measured by the discount rate are penalized even further than by discounted
future earnings.
 
           CENTURY'S DISCOUNTED DIVIDEND VALUE INCLUDING COST SAVINGS
 
<TABLE>
<CAPTION>
                                                                     VALUE
                                                           -------------------------
                                                                DISCOUNT RATE*
                                                           -------------------------
                                                            11%       13%       15%
                                                           ------    ------    -----
                                                                 (IN MILLIONS)
<S>                                                        <C>       <C>       <C>
TERMINAL VALUE
     12 times earnings..................................   $ 96.2    $ 89.0    $82.4
     14 times earnings..................................    108.2      99.9     92.4
</TABLE>
 
<TABLE>
<CAPTION>
                                                                  PER SHARE
                                                          --------------------------
<S>                                                       <C>       <C>       <C>
TERMINAL VALUE
     12 times earnings.................................   $18.96    $17.53    $16.24
     14 times earnings.................................    21.32     19.69     18.22
</TABLE>
 
- ---------------
 
- - Assumes 8% stand alone annual growth rate and 1.20% ROA with equity in excess
  of 7.00% of assets dividended out, 15% cost savings phased in over two years
  and 7% operating expense growth.
 
     Using the discounted dividend analysis and assuming an 8% stand alone
growth rate, which is the recent history of Century, equity in excess of 7% of
assets dividended out annually, a smaller 1% return on average assets to adjust
for the lower capitalization, a 7% operating expense growth with a 15% cost
savings phased in over a two year period, 12 times earnings terminal value at
the end of five years and a 13% discount rate produced a sale value for Century
of $89.0 million. At an 11% discount rate and 14 times earnings terminal value,
Century's value is approximately $100 million.
 
SUMMARY
 
     Recent acquisition pricing suggests the sale value for normal banks in
Century's extended market is 20 to 24 times earnings, which is higher than the
value produced by investment calculations. How this translates into book
 
                                      D-13
<PAGE>   136
 
value is determined by the return on equity of the acquired institutions, but
the most recent offers have been above 250% of book.
 
                            MARKET VALUE ADJUSTMENTS
 
     To determine the "fair" sale value of Century, it is necessary to consider
how it differs from other banks and bank holding companies that were sold
recently, and then make adjustments based on the differences, if any. Some areas
that should be considered are profitability, capital, growth, size, market,
asset mix, asset quality, deposit mix and management. Also, if there are any
unique circumstances, they also should be considered.
 
PROFITABILITY
 
     Earnings are the primary determinant of sale value and have been used to
determine Century's "fair" value, but relationships based on earnings also have
to consider their sustainability. Century's past consistency and strong market
position make it likely that the present level of earnings as a percent of
assets can be maintained. Since net income was used to determine Century's
"fair" sale value and is a fair representation of future earning power, no
change in value is needed based on profitability.
 
CAPITALIZATION
 
     Century is adequately-capitalized and is not close to "excess," as is the
case with so many small and mid-size banks, which is a plus. Normal capital,
though, does not effect an earnings-derived value, and, as a result, no
adjustment is needed based on capital.
 
GROWTH MOMENTUM
 
     In the most recent years, Century's assets have been growing at about 8%
per annum, which has been exceptional for the markets being served. The
sustainability of this growth in a low growth environment is questionable and,
as a result, the growth on its own is not a cause for a value adjustment.
 
SIZE
 
     The comparable bank acquisitions take into account Century's size. As a
result, size is not a reason for a value adjustment.
 
MARKET
 
     The market served, which is primarily Beaver County, is a low growth area,
but it also offers minimal asset quality risk. This, however, is the case with
most markets in Century's extended market and is not a cause for a downward
value adjustment.
 
ASSET MIX AND QUALITY
 
     Century has a high loan-to-asset relationship, but it also has a good mix
and high asset quality. The higher than normal loan-to-asset ratio, though, is a
major determinant of profitability and is included in a profit-derived price.
The asset quality, albeit excellent, also is no longer a major differentiating
factor between banks. Thus, there is no reason for value adjustments relative to
asset quality or mix.
 
DEPOSIT MIX
 
     Century's deposit mix has created an above-average cost of funds, but
deposits also are a major ingredient in profitability and, as such, are already
impacting a value that is earnings-driven. As a result, deposits do not merit a
separate value adjustment.
 
MANAGEMENT
 
     Since Century is a high performer, and has been so for a long time, its
management is obviously very good. Its management, though, is not that clearly
better than for the comparable acquisitions and does not merit a value
adjustment.
 
                                      D-14
<PAGE>   137
 
UNIQUE CONSIDERATIONS
 
     Century is typical of banks in its extended market. As such, it has no
unique characteristics.
 
CONCLUSION
 
     When the various components of Century's sale value are considered, it is
generally similar to other banks of its size. Thus, there is no cause for
adjusting the "fair" value of Century relative to a normal profit-driven value.
 
                                    CITIZENS
 
THE OFFER
 
     Citizens has offered to acquire Century by exchanging .425 shares of
Citizens common stock for each share of Century's common stock outstanding and
to convert all Century options to buy common stock to Citizens options. This
offer had a monetary value of $138.7 million as of November 17, 1997.
 
DESCRIPTION OF ACQUIRER
 
     Citizens is a multi-bank holding company headquartered in Salineville,
Ohio. It has two bank subsidiaries, The Citizens Banking Company ("Citizens
Banking"), which includes all of its Ohio banking offices, and First National
Bank of Chester ("First Chester") in West Virginia. Its other subsidiaries are
Freedom Financial Insurance Company and Freedom Express, Inc.
 
     The primary banking affiliate is Citizens Banking, which has 27 of the 28
banking offices, and it began operating in 1902. It is regulated by the Ohio
State Bank Department, and its deposits are insured by the FDIC.
 
     Citizens moved into West Virginia on January 1, 1990 by acquiring First
Chester in an exchange of stock valued at $2.7 million. This was about 139% of
First Chester's book value.
 
     In its largest early nineties acquisition, Citizens, in September 1990
acquired from the Resolution Trust Company ("RTC") of the failed Midland Buckeye
Federal Savings and Loan ("Midland Buckeye") of Alliance, Ohio. The deposits
acquired were about $145 million. Citizens subsequently has sold two of the
Midland Buckeye branches with combined deposits of $16 million.
 
     In October 1990, Citizens consummated a second transaction with the RTC
whereby it purchased certain assets and the deposits of a branch of Union
Federal Savings Bank ("Union Federal"). At the time of acquisition, the branch
had deposits of $20 million. It was located in Leetonia, Ohio.
 
                        CITIZENS' RECENT MERGER HISTORY*
 
<TABLE>
<CAPTION>
                                                                                    PRICE
                                                                           ------------------------
                                                                  OFFER        TIMES        PERCENT
                                               YEAR*    ASSETS    PRICE      EARNINGS       OF BOOK
                                               -----    ------    -----      --------       -------
                                                    (IN MILLIONS)
<S>                                            <C>      <C>       <C>      <C>              <C>
Citizens
  UniBank***.................................  1997      $215      $54         24.6X          313%
  Navarre Deposit............................  1996        76       16         21.9           220
  Western Reserve............................  1995        63       11         16.1           232
  Unity......................................  1994        71        5          --            107
  Firestone Bank.............................  1993        72        7          --            169
  Midland-Buckeye S&L........................  1990       151               RTC Purchase
</TABLE>
 
- ---------------
 
  * Whole banks and thrifts.
 
 ** Year announced.
 
*** Pending.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
                                      D-15
<PAGE>   138
 
     In 1994, Citizens acquired two small banks. The first was the Firestone
Bank ("Firestone") in Lisbon, Ohio that merged with Citizens in an exchange of
stock valued at $6.9 million, which was 169% of book. The second was Unity
Bancorp ("Unity") and its affiliate, New Waterford Bank ("New Waterford"), of
New Waterford, Ohio that was acquired in an exchange of stock valued at $5
million, which was 107% of book. Each was merged into Citizens Banking.
 
     In 1996, Citizens acquired Western Reserve Bank ("Western Reserve") of
Lowellville, Ohio and the Navarre Deposit Bank Company ("Navarre Deposit") of
Navarre, Ohio. The Western Reserve acquisition was an exchange of stock valued
at $10.8 million, or 232% of book. The Navarre Deposit acquisition was
accomplished through an exchange of stock valued at $15.6 million, or 220% of
book.
 
     In 1997, Citizens announced the purchase of three Belmont County, Ohio
branches of F.N.B. Corp. ("F.N.B.") and the acquisition of UniBank. The branches
had deposits of about $66 million at the time of the announcement. UniBank is
its largest acquisition to date and being accomplished through an exchange of
stock valued at $54 million, or 313% of book.
 
     The F.N.B. and UniBank branches as well as those of Firestone, New
Waterford, Western Reserve and Navarre Deposit will be operated as offices of
Citizens banking. First Chester has been operated independently because of
interstate banking regulations, but this will change in the future.
 
MARKET
 
     Citizens' principal subsidiary, Citizens Banking, is headquartered in
Salineville, Ohio, which is in Columbiana County, but it is also very close to
the Jefferson County line. More than 50% of Citizens' deposits are in these two
counties. The large deposit share in Columbiana County is due in part to the
purchase of failed thrift deposits.
 
                     CITIZENS' MARKET POSITION BY COUNTY**
 
<TABLE>
<CAPTION>
                                                           DEPOSITS      1996     1988     RANK*
                                                           --------      -----    -----    -----
                                                          (IN MILL.)
<S>                                                       <C>            <C>      <C>      <C>
OHIO
  Columbiana............................................     $277         25.5%    13.4%    1st
  Stark.................................................      139          3.4       --     6th
  Jefferson.............................................      128         14.0     15.2     4th
  Mahoning..............................................       88          2.7       --     9th
  Belmont...............................................       70          7.2       --     6th
  Carroll...............................................       33         33.0     20.6     1st
WEST VIRGINIA
  Hancock...............................................       21          3.3      3.5     5th
</TABLE>
 
- ---------------
 
 * Among banks only.
 
** Does not include UniBank.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     Citizens is a marginal factor in Stark and Mahoning counties, two large
counties to the north. It does not have branches in these counties' major
business centers, Canton and Youngstown.
 
     In Carroll County, Citizens has a single branch located in the largest
city, Carrollton, that holds 30% of the county deposits. Carroll County, though,
is a small, rural county with a limited deposit base.
 
     It recently entered Belmont County via the branch purchases from F.N.B. The
$70 million in deposits these branches held in mid-1996 represented about a 7%
share.
 
     First Chester has a single branch in Hancock County. This ranks it fourth
in size, but it is still a marginal factor with less than 4% of the county's
deposits.
 
                                      D-16
<PAGE>   139
 
     The overall market has been economically stagnant for years, and two
counties from which Citizens derives over 50% of its business have the lowest
per household incomes in the immediate region. Of the six Ohio and one West
Virginia counties in which Citizens is present, only Carroll gained population
during the eighties. Columbiana, Stark and Jefferson counties had population
declines of .5%, .3% and 1.3% per annum, respectively.
 
FINANCIAL PERFORMANCE
 
     Citizens has been an exceptional financial performer. In less than ten
years, it has increased assets more than four-fold to a little over $1 billion,
and it has had a return on average equity in excess of 16% in each of those
years. Only in 1991, did its return on average assets fall below 1.22% of
average assets, and then it was still a very respectable 1.00%; and in that
year, it was absorbing a major thrift acquisition.
 
     Its performance in the last three years has been particularly impressive.
Through 1995, 1996 and the first nine months of 1997, Citizens had average
returns on average assets and equity of 1.65% and 18.50%, respectively. In the
first nine months of 1997, the return on average assets was 1.72%, and the
return on average equity was 18.56%.
 
                        CITIZENS' FINANCIAL PERFORMANCE
 
<TABLE>
<CAPTION>
                                             PERCENT OF ASSETS
                                         -------------------------   RETURN
                  TANGIBLE       NET        NET         TANGIBLE     ON AVG.
       ASSETS      CAPITAL      INCOME     INCOME       CAPITAL      EQUITY
       ------     --------      ------   ----------   ------------   -------
                (IN MILLIONS)
<S>    <C>      <C>             <C>      <C>          <C>            <C>
1997*  $1,050       $98.4       $17.2       1.72%         9.37%       18.56%
1996      945        88.2        14.7       1.64          9.32        17.65
1995      814        71.5        11.9       1.61          8.78        19.30
1994      728        54.1         9.1       1.27          7.44        16.95
1993      572        39.8         7.4       1.39          6.98        19.44
1992      512        31.6         6.0       1.23          6.20        18.84
1991      464        25.9         4.6       1.00          5.62        16.87
1990      461        20.7         4.2       1.22          4.54        17.63
1989      265        20.1         3.9       1.48          7.71        19.94
1988      244        18.1         3.6       1.48          7.44        21.12
</TABLE>
 
- ---------------
 
*September 30, 1997 or nine months annualized.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     Citizens' rapid growth and the Midland-Buckeye cash purchase had kept the
strong earnings from creating excess capitalization. After buying
Midland-Buckeye from the RTC, its capital was reduced below 5% of assets, and
even growing rapidly as a percent of assets after that, capital did not go above
7% of assets until 1994. By the end of 1995, though, capital was nearing 9% of
assets and went above 9% in 1996. Tangible capital as of September 30, 1997 was
still almost 9.37% of assets.
 
     Citizens' good earnings were historically a product of wide margins that
were primarily yield-driven. Net interest income has been above 4.50% of average
assets since 1990, and it had increased every year after 1990 until it reached
5.00% in 1995. In 1996, it dipped slightly to 4.87% of average assets, but this
still was a wide margin.
 
                                      D-17
<PAGE>   140
 
<TABLE>
<CAPTION>
              CITIZENS' INCOME AND EXPENSE CHANGE
                   PERCENT OF AVERAGE ASSETS
       --------------------------------------------------
        NET                              CONTR.
        INT.    NET OPER.   NET OPER.      TO       NET
       INCOME    EXPENSE     INCOME     RESERVES   INCOME
       ------   ---------   ---------   --------   ------
<S>    <C>      <C>         <C>         <C>        <C>
1997*   4.46%**   1.62%**     2.84%       .17%      1.72%
1996    4.87      2.03        2.84        .18       1.73
1995    5.00      2.35        2.65        .26       1.61
1994    4.93      2.53        2.40        .34       1.37
1993    4.68      2.19        2.49        .53       1.39
1992    4.78      2.44        2.34        .62       1.23
1991    4.52      2.54        1.98        .58        .99
1990    4.50      2.42        2.08        .47       1.21
</TABLE>
 
- ---------------
 
 * Nine months annualized.
 
** Assets leveraged by an approximate $80 million increase in securities and
   borrowed funds.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     These margins were enough to cover net operating expense that was generally
in the 2.40% to 2.60% of average assets range in the early nineties and still
produce good earnings. It was when net overhead, helped by the industrywide
reduction in deposit insurance costs, fell to 2.35% of average assets in 1995
and then 2.03% in 1996 that its return on average assets was able to climb to
very high levels.
 
     Citizens' leveraging in 1997, was reflected in sharp declines in both net
interest income and net operating expense. In the first nine months of 1997, net
operating expense fell to 4.46% of average assets, or 41 basis points below
1996. Meanwhile net overhead declined to 1.62% of average assets, which was 41
basis point below 1996. The net result, though, was no change in net operating
income as a percent of average assets.
 
STOCK PERFORMANCE
 
     Citizens' strong financial performance has been reflected in a stock price
that as of November 17, 1997 was trading at a price of $61.75 per share. This
was a high 21.9 times earnings and 365% of book.
 
                          CITIZENS' STOCK PERFORMANCE
 
<TABLE>
<CAPTION>
                                            PRICE
                     PER SHARE        ------------------
        STOCK    ------------------    TIMES     PERCENT   DIVIDEND
        PRICE    EARNINGS   CAPITAL   EARNINGS   OF BOOK    YIELD
        ------   --------   -------   --------   -------   --------
<S>     <C>      <C>        <C>       <C>        <C>       <C>
1997*   $61.75    $2.82     $16.96     21.9X       365%      1.75%
1996**   33.25     2.49      15.21      13.4       219       2.55
1995     29.50     2.13      13.58      13.8       217       1.79
1994     24.00     1.78      11.19      13.5       214       1.20
1993     20.67     1.55      10.29      13.3       201        .74
1992     11.92     1.34       7.87       8.9       151       1.20
1991      8.33     1.01       6.69       8.2       125       1.56
1990      8.41      .93       5.81       9.0       145       1.35
</TABLE>
 
- ---------------
 
 * November 17, 1997.
 
** December 31st in this and preceding years.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     Since 1990, the pricing of Citizens stock has gone through three distinct
phases. From 1990 to 1992, it was an unlisted stock that was selling between
eight and nine times earnings and usually less than 150% of book.
 
                                      D-18
<PAGE>   141
 
During this period, the price rose from a little over $8 per share to almost
$12. Then from 1993 through 1996, with the stock listed on a national exchange,
its price was usually in the 13 to 14 times earnings and 200% to 220% of book
range. During this period, the stock rose from the almost $12 per share at the
end of 1992 to a little over $33 at the end of 1996. The third period is 1997
with a stock priced over $60 per share and very high multiples of earnings and
book.
 
     Citizens has had low dividend yields during the nineties as it concentrated
on growth and rewarding shareholders through tangible capital per share and
stock price appreciation. Prior to 1996, the dividend yield was less than 2%
even though the stock price was quite low during some of these years. In 1996,
the dividend was increased substantially, and the yield based on the year-end
stock price was 2.55%. The almost 60% increase in the stock price since then has
lowered the yield again to less than 2%.
 
FINANCIAL PERFORMANCE AND STOCK PRICE COMPARISON
 
     To determine the "fair" value of the Citizens' common stock to be exchanged
for the common stock of Century, Citizens has been compared to ten
publicly-traded bank holding companies ("comparable banks" or the "comparative
group"). These comparable banks have assets in the $500 million to $3 billion
range and no extraordinary characteristics.
 
                  SUMMARY AND DESCRIPTION OF COMPARABLE BANKS
 
<TABLE>
<CAPTION>
                         ASSETS*        HEADQUARTERS
                        ----------      ------------
                        (IN MILL.)
<S>                     <C>          <C>
COMPARABLE BANKS**
  Banc First              $1,120     Salineville, Ohio
  City Holding             1,335     Charleston, W.Va.
  First Financial          2,421     Hamilton, Ohio
  Horizon                    970     Beckley, W.Va.
  Matewan                    634     Williamson, W.Va.
  Mid Am                   2,188     Bowling Green, Ohio
  Park National            2,261     Newark, Ohio
  Second                     902     Warren, Ohio
  United                   2,581     Charleston, W.Va.
  WesBanco                 1,762     Wheeling, W.Va.
</TABLE>
 
- ---------------
 
* September 30, 1997.
 
** Publicly-traded with assets between $500 million and $3 billion in Ohio and
   West Virginia.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     The comparable banks are all in Ohio and West Virginia. The Ohio members of
the comparative group include BancFirst Ohio Corp. ("BancFirst"); First
Financial Bancorp ("First Financial"); Mid Am Inc. ("Mid Am"); Park National
Corporation ("Park National"); and Second Bancorp, Incorporated ("Second"). In
West Virginia are City Holding Company ("City Holding"), Horizon Bancorp, Inc.
("Horizon"), Matewan Bancshares, Inc. ("Matewan"), United Bankshares, Inc.
("United") and WesBanco, Inc. ("WesBanco").
 
                                      D-19
<PAGE>   142
 
                         INCOME AND EXPENSE COMPARISON*
 
<TABLE>
<CAPTION>
                              PERCENT OF ASSETS**
                      ------------------------------------   RETURN
                       NET     NET OPER.   TANGIBLE          ON AVG
                      INCOME    INCOME     CAPITAL    NPAS   EQUITY
                      ------   ---------   --------   ----   ------
<S>                   <C>      <C>         <C>        <C>    <C>
Citizens               1.72%    2.82%        9.38%    .23%   18.39%
 
COMPARABLE BANKS
  BancFirst             .97      1.77        6.37     .17    13.32
  City Holding         1.05      2.56        6.40     .27    14.24
  First Financial      1.70      2.16       11.22     .32    14.65
  Horizon              1.40      2.38       11.55     .38    12.10
  Matewan              1.03      2.61       10.21     1.08    9.68
  Mid Am               1.51      2.06        7.78     .26    17.77
  Park National        1.71      1.91        9.18     .20    18.51
  Second               1.05      2.15        8.16     .92    13.15
  United               1.71      1.63        9.24     .33    15.38
  WesBanco             1.33      2.04       13.29     .68     9.68
     Median            1.37      2.10        9.21     .33    13.78
</TABLE>
 
- ---------------
 
* September 30, 1997 or Twelve Months Ending September 30, 1997.
 
** Or average assets.
 
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     When Citizens' financial performance is compared with these banks as of
September 30, 1997, or the twelve months ending that date, it is superior in
each criteria, and in most cases, far superior. Its returns on average assets
and equity of 1.72% and 18.39%, respectively, are more than one-third higher
than the comparative group medians, and only one of the comparable banks, Park
National, had a higher return on equity. These high returns were solidly-based
with net operating income at 2.82% of average assets, which was substantially
higher than comparable bank median of 2.10%.
 
     The only area in which Citizens was not far superior to the comparative
group median was tangible capital as a percent of assets. Its capital of 9.38%
of assets as of September 30, 1997, was marginally higher and trending toward
excess capitalization, but with an 18.39% return on equity, the capital is being
well utilized.
 
     Asset quality also was a strong point for Citizens. With only .23% of its
assets not performing at the end of 1997's third quarter, it was significantly
below the comparable bank median of .33%.
 
     Citizens' strong financial performance is reflected in its stock price. As
of November 17, 1997, its stock was trading at 21.9 times earnings and 365% of
book. These were both above the comparative group medians, although the multiple
of earnings, which normally is the primary determinant of value, was only
modestly higher.
 
     When a bank has a high return on equity, a modest favorable variance in the
multiple of earnings will result in a large advantage in the price as a percent
of book. In Citizens' case, a 21.9 earnings multiple translated into a price of
365% of book. This was substantially higher than the 243% comparative group
median.
 
     Citizens does not pay as much of its earnings out in dividends as these
other banks -- i.e., a 38% payout ratio compared to a 44% median -- and this is
reflected in a lower dividend yield. Its dividend as of November 17, 1997 was
1.75% compared to a 2.45% comparative group median. A lower dividend yield,
though, often reflects a higher growth situation, which is true of Citizens.
When its dividend is added to its annual increase in tangible capital per share,
it has delivered a gain of more than 18% annually to its shareholders since
1990.
 
                                      D-20
<PAGE>   143
 
                          STOCK PERFORMANCE COMPARISON
 
<TABLE>
<CAPTION>
                                                       PRICE
                                                -------------------
                                      STOCK      TIMES      PERCENT    DIVIDEND     PAYOUT      PERCENT
                                      PRICE*    EARNINGS    OF BOOK     YIELD      RATIO***    TRADED***
                                      ------    --------    -------    --------    --------    ---------
<S>                                   <C>       <C>         <C>        <C>         <C>         <C>
Citizens............................  $61.75      21.9X       365%       1.75%        38%          .28%
COMPARABLE BANKS
  BancFirst.........................  $44.00      16.7X       210%       2.36%        39%          .42%
  City Holding......................   41.63      20.6        280        1.83          35          .17
  First Financial...................   47.25      19.9        279        2.54          47          .24
  Horizon...........................   29.00      20.3        239        2.62          48          .27
  Matewan...........................   25.00      18.5        196        1.92          36          .11
  Mid Am............................   21.00      16.5        286        2.86          46          .38
  Park National.....................   89.31      23.0        386        2.15          41          .18
  Second............................   25.25      18.4        224        1.90          34          .22
  United............................   45.00      16.9        247        3.02          50          .75
  WesBanco..........................   30.00      21.3        195        2.67          55          .23
     Median.........................      --      19.2        243        2.45          44          .24
</TABLE>
 
- ---------------
 
  * November 17, 1997.
 ** Twelve months ending September 30, 1997.
*** Average weekly shares traded in the last three months as a percent of total
shares outstanding.
Source: SNL Securities L.P., Charlottesville, Virginia.
 
     Its stock also has a fair degree of liquidity. The average shares traded
weekly over the last three months was .28% of total shares outstanding. Only one
of the comparable banks, United, did much better, and the comparative group
median was .24%.
 
     From an overall perspective, Citizens' financial performance merits a
premium over the comparable bank median stock price, and the only "pull" in the
other direction is a low dividend, which is to be expected considering the rapid
rate of growth. How much of a premium it deserves, though, is a moot point
relative to the "fairness" of its stock price since it is trading only slightly
above the normal range of the comparative group. Thus, Citizens' stock is
"fairly" priced.
 
DILUTION IMPACT
 
     Since Citizens is paying a higher multiple of earnings for Century than the
stock being exchanged is selling at relative to its own earnings, it will be
absorbing some earnings dilution as part of this acquisition. It is almost
always a plus for a seller to get the highest price, but there is a point at
which a high price can have such a negative impact relative to earnings per
share ("EPS") dilution for the buyer that the stock the seller receives could be
devalued. The EPS dilution is also impacted by Citizens pending acquisition of
UniBank.
 
                              DILUTION CALCULATION
 
<TABLE>
<CAPTION>
                                                                                           CHANGE
                                                                                      ----------------
                                                EARNINGS       SHARES        EPS       EPS     PERCENT
                                                --------       ------       ------    -----    -------
                                                    (IN THOUSANDS)
<S>                                            <C>           <C>            <C>       <C>      <C>
Citizens.....................................   $16,640         5,898       $ 2.82       --       --
  -- Unibank.................................     2,104           994           --       --       --
Century......................................     5,364         2,157           --       --       --
                                                -------         -----       ------    -----      ---
     Total...................................   $24,108         9,049       $ 2.66*   $ .16      5.7%
                                                =======         =====
</TABLE>
 
                                      D-21
<PAGE>   144
 
<TABLE>
<CAPTION>
                                                                                           CHANGE
                                                                                      ----------------
                                                 EQUITY        SHARES        CPS       CPS     PERCENT
                                                 ------        ------       ------    -----    -------
                                               (IN MILL.)    (IN THOUS.)
<S>                                            <C>           <C>            <C>       <C>      <C>
Citizens.....................................   $   100         5,898       $16.94       --       --
  -- Unibank.................................        17           994           --       --       --
Century......................................        37         2,157           --       --       --
                                                -------         -----       ------    -----      ---
     Total...................................   $   154         9,049       $17.02    $(.08)      .4%
                                                =======         =====
</TABLE>
 
- ---------------
 
* Requires a cost savings of about $2.5 million pretax from the two acquisitions
to eliminate the dilution.
 
     The EPS dilution for the two acquisitions is large, but not overwhelming,
and should not negatively impact Citizens' stock price. Based on data for the
twelve months ending September 30, 1997, Citizens earnings per share will
decline by $.16, or 5.7% as a result of acquiring Unibank and Century. This is
in the 5% to 6% range that is usually considered the upper limit for substantial
acquisitions, and Unibank and Century are substantial acquisitions. This
dilution also should be recoverable through cost savings within a year making
the acquisitions accretive to Citizens' EPS in 1999.
 
     The dilution in Citizens' capital per share ("CPS") is accretive. Based on
September 30, 1997 capital, the CPS accretion was $.08, or .4%.
 
                                      D-22
<PAGE>   145
 
                                   VALUATION
 
     There are numerous methodologies for determining the "fair" sale value of a
bank or bank holding company. These include a) the "sale" prices of similar
institutions, b) return on investment calculations with specific growth and
earnings assumptions, c) premiums over a "fair" stock price and d) the
liquidation value.
 
     The recent sale prices of similar institutions is the most commonly used
methodology when there are sufficient comparisons as it, in effect, lets the
market determine the "fair" sale value. This approach normally assumes an
exchange of stock, and when acquirer stock prices are high, the reported sale
prices may exceed "fair" investment value calculations.
 
     Using the "sale" prices of other banks is the preferred method in this
instance. It is dictated by the current acquisition environment, which has been
dominated by transactions involving an exchange of stock.
 
     The best measurement tool is earnings if they are normal or can be
normalized, and they are the primary determinant of "fair" sale value. Since
Century's earnings have been consistent in recent years, earnings clearly are
the best determinant of its "fair" sale value. Book and asset value are only
used as a value determinant when earnings are not meaningful. Values quoted as a
percent of book are the result of the book relationship to earnings.
 
     In determining the "fair" sale value of Century, the key factor is the
acquisition prices in 1997 for banks in its extended region with assets in
excess of $100 million. There were eleven such acquisitions, with a median price
of 22 times earnings and 271% of book.
 
     Also playing major roles in determining the "fair" value are the four most
applicable acquisitions. These mergers reflect the most recent acquisition
dynamics and had a median price of 21 times earnings and 284% of book. The
highest price was in WesBanco's acquisition of Commercial at 25.9 times
earnings.
 
                              VALUATION OF CENTURY
 
<TABLE>
<CAPTION>
                                                     MEDIAN PRICE
                                               ------------------------
                                                          A PERCENT OF
                                                TIMES     -------------
                                               EARNINGS   BOOK   ASSETS
                                               --------   ----   ------
<S>                                            <C>        <C>    <C>
MID-SIZE BANKS-1997*
  Century's Extended Region..................    22.0X    271%    23.7%
Most Applicable Fulton-Keystone Heritage.....    20.8     319     33.9
  Area-Cardinal..............................    16.9     188     16.6
  WesBanco-Commercial........................    25.9     297     30.7
  FirstMerit-CoBancorp.......................    21.0     271     27.1
     Median..................................    21.0     284     28.9
DISCOUNTED FUTURE EARNINGS
  13% Discount Rate..........................    14.5     212     17.0
DISCOUNTED DIVIDENDS
  13% Discount Rate..........................    18.1     264     21.1
</TABLE>
 
<TABLE>
<CAPTION>
                                               APPLICATION TO CENTURY**
                                               ------------------------
                                                22X      280%     25%
                                               ------   ------   ------
<S>                                            <C>      <C>      <C>
Dollar Value (in millions)...................  $118.0   $102.7   $114.7
Per Share***.................................   23.25    20.24    22.60
</TABLE>
 
<TABLE>
<CAPTION>
                                               TIMES EARNINGS
                                               ---------------
                                                22X      280%
                                               ------   ------
<S>                                            <C>      <C>
Fair Value Range (in millions)...............  $112.6   $123.3
  -- Per share...............................   22.18    24.30
</TABLE>
 
- ---------------
 
  * Assets between $100 million and $5 billion.
 
                                      D-23
<PAGE>   146
 
 ** Based on September 30, 1997 or trailing four quarters book value of
    $36,679,000, assets of $458,688,000 and net income of $5,364,000.
 
*** 5,074,720 shares outstanding.
 
     Using investment calculations, discounted future earnings and dividends, to
determine Century's sale value, we feel the proper discount rate is 13%, which
creates values ranging from 14.5 to 18.1 times earnings. This translated into
212% to 264% of book.
 
     Based on the comparable transactions primarily, but also the investment
calculations, the "fair" sale value for Century, absent adjustments, is 21 to 23
times earnings, or $112.6 to $123.3 million. This is $22.18 to $24.30 per share
and equates to 307% to 336% of book. The mid-point is $118 million, or $23.25
per share.
 
     The offer by Citizens of $138.7 million, including the cost of the options,
or $26.24 per share, is a) above the "fair" value, b) should result in accretion
to Citizens' earnings as early as 1999 and c) Citizens' stock to be exchanged is
"fairly" valued. Thus, the Citizens' offer is "fair" from a financial point of
view to Century and its shareholders.
 
                                      D-24
<PAGE>   147
 
                                   APPENDIX E
 
              FAIRNESS OPINION OF SANDLER O'NEILL & PARTNERS, L.P.
 
                                       E-1
<PAGE>   148
 
February   , 1998
 
Board of Directors
Citizens Bancshares, Inc.
10 East Main Street
Salineville, OH 43945
 
Ladies and Gentlemen:
 
     You have requested our opinion as to the fairness, from a financial point
of view, to Citizens Bancshares, Inc. ("Citizens") of the consideration to be
paid by Citizens pursuant to the terms of the Agreement and Plan of Merger,
dated as of December 3, 1997 (the "Agreement"), by and between Citizens and
Century Financial Corporation ("Century"). Pursuant to the terms of this
Agreement, Century will be merged with and into Citizens with Citizens being the
surviving corporation of the merger (the "Merger"), and each share of common
stock of Century, par value $.835 per share (the "Century Common Stock"), issued
and outstanding immediately prior to the effective time of the Merger, other
than certain shares specified in the Agreement, will be converted into the right
to receive .425 of a share (the "Conversion Ratio") of the common stock, no par
value, of Citizens (the "Citizens Common Stock"), subject to adjustment as
provided in the Agreement if the average NMS Closing Price (as defined in the
Agreement) is greater than $67.50 per share or less than $56.50 per share;
provided, however, that the Conversion Ratio will not be greater than .4424. The
terms and conditions of the Merger are more fully set forth in the Agreement.
 
     Sandler O'Neill & Partners, L.P., as part of its investment banking
business, is regularly engaged in the valuation of financial institutions and
their securities in connection with mergers and acquisitions and other corporate
transactions. In connection with this opinion we have reviewed, among other
things: (i) the Agreement and exhibits thereto; (ii) the Stock Option Agreement,
dated as of November 17, 1997, by and between Citizens and Century; (iii)
Citizens' audited consolidated financial statements and management's discussion
and analysis of financial condition and results of operations contained in its
annual report to shareholders for the year ended December 31, 1996; (iv)
Century's audited consolidated financial statements and management's discussion
and analysis of financial condition and results of operations contained in its
annual report to shareholders for the year ended December 31, 1996; (v)
Citizens' unaudited consolidated financial statements and management's
discussion and analysis of financial condition and results of operations
contained in its Quarterly Report on Form 10-Q for the quarters ended March 31,
June 30 and September 30, 1997, respectively; (vi) Century's unaudited
consolidated financial statements and management's discussion and analysis of
financial condition and results of operations contained in its Quarterly Report
on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1997,
respectively; (vii) summary financial information contained in Citizen's press
release dated January 12, 1998 concerning Citizen's financial condition and
resulting operations for the three months and year ended December 31, 1997;
(viii) summary financial information contained in Century's press release dated
             , 1998 concerning Century's financial condition and results of
operations for the three months and year ended December 31, 1997; (ix) certain
financial analyses and forecasts of Citizens prepared by and reviewed with
management of Citizens and the views of senior management of Citizens regarding
Citizens' past and current business operations, results thereof, financial
condition and future prospects; (x) certain financial analyses and forecasts of
Century prepared by and reviewed with management of Century and the views of
senior management of Century regarding Century's past and current business
operations, results thereof, financial condition and future prospects; (xi) the
pro forma impact of the Merger on Citizens; (xii) the publicly reported
historical price and trading activity for the Century Common Stock and the
Citizens Common Stock, including a comparison of certain financial and stock
market information for Century and Citizens with similar publicly available
information for certain other companies the securities of which are publicly
traded; (xiii) the financial terms of recent business combinations in the
banking industry, to the extent publicly available; (xiv) the current market
environment generally and the banking environment in particular; and (xv) such
other information, financial studies, analyses and investigations and financial,
economic and market criteria as we considered relevant.
 
                                       E-2
<PAGE>   149
 
Board of Directors
Citizens Bancshares, Inc.
February   , 1998
Page  2
 
     In performing our review, we have assumed and relied upon, without
independent verification, the accuracy and completeness of all the financial
information, analyses and other information that was publicly available or
otherwise furnished to, reviewed by or discussed with us, and we do not assume
any responsibility or liability therefor. We did not make an independent
evaluation or appraisal of the specific assets, the collateral securing assets
or the liabilities of Citizens or Century or any of their subsidiaries, or the
collectibility of any such assets, nor have we been furnished with any such
evaluations or appraisals (relying, where relevant, on the analyses and
estimates of Citizens and Century). With respect to the financial projections
reviewed with management, we have assumed that they have been reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the respective managements of the respective future financial
performances of Citizens and Century and that such performances will be
achieved. We have also assumed that there has been no material change in
Citizens' or Century's assets, financial condition, results of operations,
business or prospects since September 30, 1997, the date of the last financial
statements noted above. We have assumed that the Merger will be accounted for as
a pooling of interests, that Citizens and Century will remain as going concerns
for all periods relevant to our analyses and that the conditions precedent in
the Agreement are not waived.
 
     Our opinion is necessarily based on financial, economic, market and other
conditions as in effect on, and the information made available to us as of, the
date hereof. Events occurring after the date hereof could materially affect this
opinion. We have not undertaken to update, revise or reaffirm this opinion or
otherwise comment upon events occurring after the date hereof. We are expressing
no opinion herein as to what the value of Citizens Common Stock will be when
issued to Century's shareholders pursuant to the Agreement or the prices at
which Citizens Common Stock or Century Common Stock will trade at any time.
 
     We have acted as Citizens' financial advisor in connection with the Merger
and will receive a fee for our services, a significant portion of which is
contingent upon consummation of the Merger. We will also receive a fee for
rendering this opinion. In the past, we have also provided, and may in the
future provide, certain other investment banking services for Citizens and have
received, and will receive, compensation for such services.
 
     In the ordinary course of our business, we may actively trade the equity
securities of Citizens and Century for our own account and for the accounts of
our customers and, accordingly, may at any time hold a long or short position in
such securities.
 
     It is understood that this opinion is for the information of the Board of
Directors of Citizens in connection with its consideration of the Merger and
does not constitute a recommendation to any shareholder of Citizens as to how
such shareholder should vote on the proposed issuance of Citizens Common Stock
in connection with the Merger. Our opinion is not to be quoted or referred to,
in whole or in part, in a registration statement, prospectus, proxy statement or
in any other document, nor shall this opinion be used for any other purposes,
without Sandler O'Neill's prior written consent; provided, however, that we
hereby consent to the inclusion of this opinion as an appendix to Citizen's and
Century's Joint Proxy Statement/Prospectus dated the date hereof.
 
     Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Conversion Ratio is fair to Citizens from a financial point of
view.
 
                                            Very truly yours,
 
                                            Sandler O'Neill & Partners, L.P.
 
                                       E-3
<PAGE>   150
 
                                   APPENDIX F
 
                AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED
              DECEMBER 31, 1997 FOR CENTURY FINANCIAL CORPORATION
 
                                       F-1
<PAGE>   151
[LOGO] 
                         REPORT OF INDEPENDENT AUDITORS
 
Board of Directors and Stockholders
Century Financial Corporation
 
     We have audited the accompanying consolidated balance sheet of Century
Financial Corporation and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of income, changes in stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1997.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Century
Financial Corporation and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.
 
     As explained in the notes to the consolidated financial statements,
effective January 1, 1995, the Corporation adopted a new method of accounting
for impairment of loans and related allowance for loan losses.
 
/s/ S.R. Snodgrass, A.C.
 
Wexford, PA
January 16, 1998
 
SNODGRASS Letterhead
 
                                       F-2
 
Logo
 
SNODGRASS Letterhead Footer
<PAGE>   152
 
                         CENTURY FINANCIAL CORPORATION
 
                           CONSOLIDATED BALANCE SHEET
 
<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              --------------------
                                                                1997        1996
                                                              --------    --------
                                                                 (IN THOUSANDS)
<S>                                                           <C>         <C>
ASSETS
Cash and due from banks.....................................  $ 12,439    $ 12,661
Interest-bearing deposits in other banks....................     1,645         343
Federal funds sold..........................................    11,235       8,790
Investment securities available for sale....................    67,647      71,873
Loans (net of unearned income of $12,717 and $10,677).......   353,921     308,010
Less allowance for loan losses..............................     4,717       3,234
                                                              --------    --------
  Net loans.................................................   349,204     304,776
Premises and equipment......................................    11,562      10,020
Accrued interest and other assets...........................     4,800       4,395
                                                              --------    --------
     TOTAL ASSETS...........................................  $458,532    $412,858
                                                              ========    ========
LIABILITIES
Deposits:
  Noninterest-bearing demand................................  $ 47,994    $ 41,959
  Interest-bearing demand...................................    36,265      33,754
  Savings...................................................    33,278      33,625
  Money market..............................................    52,523      60,457
  Time......................................................   222,866     193,599
                                                              --------    --------
     Total deposits.........................................   392,926     363,394
Short term borrowings.......................................     4,000       7,000
Other borrowings............................................    20,000       4,000
Accrued interest and other liabilities......................     4,898       4,428
                                                              --------    --------
     TOTAL LIABILITIES......................................   421,824     378,822
                                                              --------    --------
STOCKHOLDERS' EQUITY
Common stock, par value $.835; authorized 8,000,000 shares;
  issued 5,108,809 and 3,383,943 shares.....................     4,266       2,826
Additional paid in capital..................................     3,223       2,834
Retained earnings...........................................    28,823      28,239
Net unrealized gain on securities...........................       613         476
Treasury stock, at cost (16,561 and 20,490 shares)..........      (217)       (339)
                                                              --------    --------
     TOTAL STOCKHOLDERS' EQUITY.............................    36,708      34,036
                                                              --------    --------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............  $458,532    $412,858
                                                              ========    ========
</TABLE>
 
See accompanying notes to the consolidated financial statements.
                                       F-3
<PAGE>   153
 
                         CENTURY FINANCIAL CORPORATION
 
                        CONSOLIDATED STATEMENT OF INCOME
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              -----------------------------
                                                               1997       1996       1995
                                                              -------    -------    -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
INTEREST INCOME
  Interest and fees on loans:
     Taxable................................................  $27,249    $23,025    $20,462
     Tax exempt.............................................    2,368      1,908      1,344
  Interest-bearing deposits in other banks..................       30          4          1
  Federal funds sold........................................      498        161        233
  Investment securities:
     Taxable................................................    3,848      4,785      5,012
     Tax exempt.............................................      649        681        633
                                                              -------    -------    -------
          Total interest income.............................   34,642     30,564     27,685
                                                              -------    -------    -------
INTEREST EXPENSE
  Deposits..................................................   16,286     13,054     12,234
  Short term borrowings.....................................      399        494        148
  Other borrowings..........................................      561        318        243
                                                              -------    -------    -------
          Total interest expense............................   17,246     13,866     12,625
                                                              -------    -------    -------
NET INTEREST INCOME.........................................   17,396     16,698     15,060
Provision for loan losses...................................    2,070        625        240
                                                              -------    -------    -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES.........   15,326     16,073     14,820
                                                              -------    -------    -------
OTHER INCOME
  Service fees on deposit accounts..........................    1,472      1,448      1,496
  Trust Department income...................................      980        801        673
  Investment securities gains (losses), net.................       --          1        (14)
  Other.....................................................      706        466        419
                                                              -------    -------    -------
          Total other income................................    3,158      2,716      2,574
                                                              -------    -------    -------
OTHER EXPENSE
  Salaries and employee benefits............................    6,825      6,708      5,950
  Net occupancy expense.....................................    1,112      1,065      1,027
  Equipment expense.........................................    1,049      1,025        920
  Deposit insurance premium.................................       44          2        347
  Other.....................................................    4,364      3,813      3,496
                                                              -------    -------    -------
          Total other expense...............................   13,394     12,613     11,740
                                                              -------    -------    -------
INCOME BEFORE INCOME TAXES..................................    5,090      6,176      5,654
Income taxes................................................      868      1,270      1,386
                                                              -------    -------    -------
NET INCOME..................................................  $ 4,222    $ 4,906    $ 4,268
                                                              =======    =======    =======
EARNINGS PER SHARE:
  Basic.....................................................  $  0.83    $  0.97    $  0.84
  Diluted...................................................  $  0.82    $  0.96    $  0.84
</TABLE>
 
See accompanying notes to the consolidated financial statements.
                                       F-4
<PAGE>   154
 
                         CENTURY FINANCIAL CORPORATION
 
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                                                      NET
                                              ADDITIONAL                          UNREALIZED         TOTAL
                                     COMMON    PAID IN     RETAINED   TREASURY    GAIN (LOSS)    STOCKHOLDERS'
                                     STOCK     CAPITAL     EARNINGS    STOCK     ON SECURITIES      EQUITY
                                     ------   ----------   --------   --------   -------------   -------------
                                                                  (IN THOUSANDS)
<S>                                  <C>      <C>          <C>        <C>        <C>             <C>
Balance, December 31, 1994.........  $2,810     $2,638     $22,911     $  --        $ (703)         $27,656
 
Net income.........................                          4,268                                    4,268
Dividends ($.37 per share).........                         (1,892)                                  (1,892)
Stock options exercised............     10         117                                                  127
Purchase of Treasury stock.........                                     (125)                          (125)
Dividend reinvestment plan.........                             (2)      109                            107
Net unrealized gain on
  securities.......................                                                  1,601            1,601
                                     ------     ------     -------     -----        ------          -------
Balance, December 31, 1995.........  2,820       2,755      25,285       (16)          898           31,742
 
Net income.........................                          4,906                                    4,906
Dividends ($.39 per share).........                         (1,952)                                  (1,952)
Stock options exercised............      6          73                                                   79
Purchase of Treasury stock.........                                     (522)                          (522)
Dividend reinvestment plan.........                  6                   199                            205
Net unrealized loss on
  securities.......................                                                   (422)            (422)
                                     ------     ------     -------     -----        ------          -------
Balance, December 31, 1996.........  2,826       2,834      28,239      (339)          476           34,036
 
Net income.........................                          4,222                                    4,222
Dividends ($.43 per share).........                         (2,182)                                  (2,182)
Fifty percent stock dividend.......  1,416                  (1,416)                                      --
Stock options exercised............     24         193         (40)      270                            447
Purchase of Treasury stock.........                                     (351)                          (351)
Dividend reinvestment plan.........                 34                   183                            217
Employee stock purchase plan.......                  2                    20                             22
Tax benefit from stock options
  exercised........................                160                                                  160
Net unrealized gain on
  securities.......................                                                    137              137
                                     ------     ------     -------     -----        ------          -------
Balance, December 31, 1997.........  $4,266     $3,223     $28,823     $(217)       $  613          $36,708
                                     ======     ======     =======     =====        ======          =======
</TABLE>
 
See accompanying notes to the consolidated financial statements.
                                       F-5
<PAGE>   155
 
                         CENTURY FINANCIAL CORPORATION
 
                      CONSOLIDATED STATEMENT OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                              --------------------------------
                                                                1997        1996        1995
                                                              --------    --------    --------
                                                                       (IN THOUSANDS)
<S>                                                           <C>         <C>         <C>
OPERATING ACTIVITIES
  Net income................................................  $  4,222    $  4,906    $  4,268
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Provision for loan losses..............................     2,070         625         240
     Depreciation, amortization, and accretion, net.........       842         271       1,403
     Deferred income taxes..................................      (512)         60         209
     Investment securities (gains) losses, net..............        --          (1)         14
     Decrease (increase) in accrued interest receivable.....      (287)        330        (382)
     Increase in accrued interest payable...................       615         216         747
     Other, net.............................................       284         138         138
                                                              --------    --------    --------
          Net cash provided by operating activities.........     7,234       6,545       6,637
                                                              --------    --------    --------
INVESTING ACTIVITIES
  Investment securities available for sale:
     Proceeds from sales....................................        --       2,781       4,984
     Proceeds from maturities and repayments................    23,358      29,952      14,502
     Purchases..............................................   (18,936)     (5,696)    (39,222)
  Investment securities held to maturity:
     Proceeds from sales....................................        --          --         775
     Proceeds from maturities and repayments................        --          --      12,951
     Purchases..............................................        --          --     (14,273)
  Purchase of loans receivable..............................    (3,250)     (3,604)         --
  Net increase in loans.....................................   (43,159)    (47,135)    (22,638)
  Purchases of premises and equipment.......................    (2,461)     (2,246)       (843)
  Other, net................................................        --          27          --
                                                              --------    --------    --------
          Net cash used for investing activities............   (44,448)    (25,921)    (43,764)
                                                              --------    --------    --------
FINANCING ACTIVITIES
  Net increase in deposits..................................    29,532      35,069      30,286
  Net increase (decrease) in short term borrowings..........    (7,000)     (3,000)      9,530
  Proceeds from other borrowings............................    20,000         800          --
  Cash dividends............................................    (2,128)     (1,887)     (1,790)
  Proceeds from stock options exercised.....................       447          79         127
  Treasury stock purchase...................................      (351)       (522)       (125)
  Proceeds from employee stock option plan..................        22          --          --
  Proceeds from dividend reinvestment plan..................       217         205         107
                                                              --------    --------    --------
          Net cash provided by financing activities.........    40,739      30,744      38,135
                                                              --------    --------    --------
          Increase in cash and cash equivalents.............     3,525      11,368       1,008
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..............    21,794      10,426       9,418
                                                              --------    --------    --------
CASH AND CASH EQUIVALENTS AT END OF YEAR....................  $ 25,319    $ 21,794    $ 10,426
                                                              ========    ========    ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the year for:
     Interest...............................................  $ 16,631    $ 13,650    $ 11,878
     Income taxes...........................................     1,035       1,140         945
</TABLE>
 
See accompanying notes to the consolidated financial statements.
                                       F-6
<PAGE>   156
 
                         CENTURY FINANCIAL CORPORATION
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                (IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     The accounting and reporting policies of Century Financial Corporation
(Corporation), a bank holding Company, and its subsidiaries, the Century
National Bank and Trust Company (Century), and the Independent Bankers' Computer
Services, Inc. (IBCS), conform with generally accepted accounting principles and
with general practice within the banking industry.
 
     A summary of the significant accounting and reporting policies applied in
the presentation of the accompanying financial statements follows:
 
  NATURE OF OPERATIONS AND BASIS OF PRESENTATION
 
     Century Financial Corporation is a Pennsylvania corporation and is
registered under the Bank Holding Company Act. The Corporation was organized to
be the holding company of Century National Bank. The Corporation and its
subsidiary derive substantially all their income from banking and bank-related
services which include interest earnings on commercial, commercial mortgage,
residential real estate, and consumer loan financing as well as interest
earnings on investment securities and charges for deposit services to its
customers. Century provides banking services to southwestern Pennsylvania. The
Corporation is supervised by the Federal Reserve Board while Century is subject
to regulation and supervision by the Office of the Comptroller of the Currency.
 
The consolidated financial statements of the Corporation include its
wholly-owned subsidiary, Century. Significant intercompany items have been
eliminated in consolidation. Independent Bankers' Computer Services, previously
a wholly-owned subsidiary of the Corporation, was dissolved on March 31, 1995.
 
     The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial statements,
management is required to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities as of the balance sheet date and
revenues and expenses for the period. Actual results could differ significantly
from those estimates.
 
  INVESTMENT SECURITIES
 
     Investment securities are classified, at the time of purchase, based on
managements' intention and ability, as securities held to maturity or securities
available for sale. The Corporation has classified investment securities as
available for sale to serve principally as a source of liquidity. Unrealized
holding gains and losses for available for sale securities are reported as a
separate component of stockholders' equity, net of tax, until realized. Realized
securities gains and losses are computed using the specific identification
method. Interest and dividends on investment securities are recognized as income
when earned.
 
     Common stock of the Federal Home Loan Bank and Federal Reserve Bank
represent ownership in institutions which are wholly-owned by other financial
institutions. These securities are accounted for at cost and are classified with
equity securities available for sale.
 
  LOANS
 
     Interest from installment loans is recognized in income over the life of
the loans using a method which approximates a level yield. Interest on all other
loans is recognized as interest income on the accrual method. For commercial and
real estate mortgage loans on which interest is 90 days past due, accrual of
income is discontinued, and any previously accrued interest is reversed against
current income. Installment and credit card loans are generally charged off
between 90 and 180 days past due or when deemed uncollectible in the opinion of
management.
 
                                       F-7
<PAGE>   157
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Loan origination and commitment fees and certain direct loan origination
costs are being deferred and the net amount amortized as an adjustment to the
related loan's yield. These amounts are being amortized over the contractual
life of the related loans.
 
  ALLOWANCE FOR LOAN LOSSES
 
     Effective January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standards Statement No. 114, "Accounting by Creditors for Impairment
of a Loan," as amended by Statement No. 118. Under this Standard, the
Corporation estimates credit losses on impaired loans based on the present value
of expected cash flows or fair value of the underlying collateral if the loan
repayment is expected to come from the sale or operation of such collateral.
Statement 118 amends Statement 114 to permit a creditor to use existing methods
for recognizing interest income on impaired loans eliminating the income
recognition provisions of Statement 114. The adoption of these statements did
not have a material effect on the Corporation's financial position or results of
operations.
 
     Impaired loans are commercial and commercial real estate loans for which it
is probable that the Corporation will not be able to collect all amounts due
according to the contractual terms of the loan agreement. The Corporation
individually evaluates such loans for impairment and does not aggregate loans by
major risk classifications. The definition of "impaired loans" is not the same
as the definition of "nonaccrual loans," although the two categories overlap.
The Corporation may choose to place a loan on nonaccrual status due to payment
delinquency or uncertain collectibility, while not classifying the loan as
impaired, provided the loan is not a commercial or commercial real estate
classification. Factors considered by management in determining impairment
include payment status and collateral value. The amount of impairment for these
types of loans is determined by the difference between the present value of the
expected cash flows related to the loan, using the original interest rate, and
its recorded value, or as a practical expedient in the case of collateralized
loans, the difference between the fair value of the collateral and the recorded
amount of the loans. When foreclosure is probable, impairment is measured based
on the fair value of the collateral.
 
     Mortgage loans secured by one-to-four family properties and all consumer
loans are generally of smaller balances, and a homogeneous nature, thus are
measured for impairment collectively. Loans that experience insignificant
payment delays, which are defined as 90 days or less, generally are not
classified as impaired. Management determines the significance of payment delays
on a case-by-case basis, taking into consideration all of the circumstances
concerning the loan, the credit worthiness and payment history of the borrower,
the length of the payment delay, and the amount of shortfall in relation to the
principal and interest owed.
 
     The allowance for loan losses represents the amount which management
estimates is adequate to provide for potential losses in its loan portfolio. The
allowance method is used in providing for loan losses. Accordingly, all loan
losses are charged to the allowance, and all recoveries are credited to it. The
allowance for loan losses is established through a provision for loan losses
which is charged to operations. The provision is based upon management's
periodic evaluation of individual loans, the overall risk characteristics of the
various portfolio segments, past experience with losses, the impact of economic
conditions on borrowers, and other relevant factors. The estimates used in
determining the adequacy of the allowance for loan losses are particularly
susceptible to significant change in the near term.
 
  PREMISES AND EQUIPMENT
 
     Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is computed on the straight-line method over the
estimated useful lives of the assets. Expenditures for maintenance and repairs
are charged against income as incurred. Costs of major additions and
improvements are capitalized.
 
                                       F-8
<PAGE>   158
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  INTANGIBLE ASSETS
 
     Core deposit intangibles are amortized using the straight-line method over
a ten year period.
 
  TRUST DEPARTMENT
 
     Trust Department assets (other than cash deposits) held by Century in
fiduciary or agency capacities for its customers are not included in the
accompanying balance sheet since such items are not assets of Century.
Commissions and fees for services performed by Century in a fiduciary capacity
are reported on a cash basis. The annual results would not be materially
different if such income was accrued.
 
  PENSION AND PROFIT SHARING PLANS
 
     Pension and employee benefits include contributions, determined
actuarially, to a retirement plan covering the eligible employees of the
subsidiaries. Contributions to the profit sharing plan are made based on the
achievement of certain operating levels and performance ratios.
 
  INCOME TAXES
 
     The Corporation and its subsidiary file a consolidated federal income tax
return. Deferred tax assets and liabilities are reflected at currently enacted
income tax rates applicable to the period in which the deferred tax assets or
liabilities are expected to be realized or settled. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes. Deferred income tax expenses or benefits are based
on the changes in the deferred tax asset or liability from period to period.
 
  EARNINGS PER SHARE
 
     In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share."
Statement No. 128 replaced the previously reported primary and fully diluted
earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings per share is
very similar to the previously reported fully diluted earnings per share.
 
     All earnings per share amounts for all periods have been presented, and
where necessary, restated to conform to the Statement No. 128 requirements.
 
  CASH FLOW INFORMATION
 
     The Corporation has defined cash and cash equivalents as those amounts
included in the balance sheet caption Cash and due from banks, interest-bearing
deposits in other banks, and Federal funds sold.
 
  PENDING ACCOUNTING PRONOUNCEMENTS
 
     In June 1996, the FASB issued Statement No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities." The
Statement provides consistent standards for distinguishing transfers of
financial assets that are sales from transfers that are secured borrowings based
on a control-oriented "financial-components" approach. Under this approach,
after a transfer of financial assets, an entity recognizes the financial and
servicing assets it controls and liabilities it has incurred, derecognizes
financial assets when control has been surrendered and derecognizes liabilities
when extinguished. The provisions of Statement No. 125 are effective for
transactions occurring after December 31, 1996, except those provisions relating
to repurchase agreements, securities lending, and other similar transactions and
pledged collateral, which have been delayed until after December 31, 1997 by
Statement No. 127, "Deferral of the Effective Date of Certain
 
                                       F-9
<PAGE>   159
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Provisions of Statement No. 125, an amendment of Statement No. 125." The
adoption of the provisions of Statement No. 127 is not expected to have a
material impact on financial position or results of operations.
 
     In July 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income." The Statement establishes standards for reporting and presentation of
comprehensive income and its components (revenue, expenses, gains and losses) in
a full set of general purpose financial statements. It requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is presented with
the same prominence as other financial statements. The provisions of the
statement are effective for all fiscal years beginning after December 15, 1997.
The adoption of this statement is not expected to have a material impact on
financial position or results of operations.
 
  RECLASSIFICATION OF COMPARATIVE AMOUNTS
 
     Certain comparative amounts for prior years have been reclassified to
conform with current year presentations.
 
2. EARNINGS PER SHARE
 
     The following table sets forth the computation of basic and diluted
earnings per share.
 
     There are no convertible securities which would effect the numerator in
calculating basic and diluted earnings per share; therefore, net income as
presented on the Consolidated Statement of Income will be used as the numerator.
The following table sets forth a reconciliation of the denominator of the basic
and diluted earnings per share computation.
 
<TABLE>
<CAPTION>
                                                      1997        1996        1995
                                                    ---------   ---------   ---------
<S>                                                 <C>         <C>         <C>
Denominator:
  Denominator for basic earnings per
     share -- weighted-average shares.............  5,065,901   5,054,070   5,059,983
  Employee stock options..........................     74,054      36,829      10,259
                                                    ---------   ---------   ---------
  Denominator for diluted earnings per
     share -- adjusted weighted-average assumed
     conversions..................................  5,139,955   5,090,899   5,070,242
                                                    =========   =========   =========
</TABLE>
 
3. COMMON STOCK SPLIT
 
     On April 28, 1997, the Board of Directors approved a three for two stock
split. The additional shares resulting from the split was effected in the form
of a 50% stock dividend. All references to the number of common shares and per
share amounts for 1996 and 1995 have been restated to reflect the stock split.
 
                                      F-10
<PAGE>   160
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
4. INVESTMENT SECURITIES AVAILABLE FOR SALE
 
     The amortized cost and estimated market values of investment securities
available for sale are as follows:
 
<TABLE>
<CAPTION>
                                                                 1997
                                            -----------------------------------------------
                                                          GROSS        GROSS      ESTIMATED
                                            AMORTIZED   UNREALIZED   UNREALIZED    MARKET
                                              COST        GAINS        LOSSES       VALUE
                                             -------       ----         ----       -------
<S>                                         <C>         <C>          <C>          <C>
U. S. Treasury securities.................   $ 4,969       $ 65         $ --       $ 5,034
U. S. Government agency securities........    23,941        229           --        24,170
Obligations of states and political
  subdivisions............................    14,178        480          (36)       14,622
Mortgage-backed securities and
  collateralized mortgage obligations.....    18,236        179          (26)       18,389
Other securities..........................     3,988         37           --         4,025
                                             -------       ----         ----       -------
  Total debt securities...................    65,312        990          (62)       66,240
Equity securities.........................     1,407         --           --         1,407
                                             -------       ----         ----       -------
  Total...................................   $66,719       $990         $(62)      $67,647
                                             =======       ====         ====       =======
</TABLE>
 
<TABLE>
<CAPTION>
                                                                 1996
                                            -----------------------------------------------
                                                          GROSS        GROSS      ESTIMATED
                                            AMORTIZED   UNREALIZED   UNREALIZED    MARKET
                                              COST        GAINS        LOSSES       VALUE
                                             -------       ----        -----       -------
<S>                                         <C>         <C>          <C>          <C>
U. S. Treasury securities.................   $ 7,231       $ 46        $  --       $ 7,277
U. S. Government agency securities........    18,224        100           (6)       18,318
Obligations of states and political
  subdivisions............................    14,829        483          (13)       15,299
Mortgage-backed securities and
  collateralized mortgage obligation......    21,029        129          (91)       21,067
Other securities..........................     8,540         84          (11)        8,613
                                             -------       ----        -----       -------
  Total debt securities...................    69,853        842         (121)       70,574
Equity securities.........................     1,299         --           --         1,299
                                             -------       ----        -----       -------
  Total...................................   $71,152       $842        $(121)      $71,873
                                             =======       ====        =====       =======
</TABLE>
 
     The amortized cost and estimated market value of debt securities at
December 31, 1997, by contractual maturity, are shown below. Expected maturities
of mortgage-backed securities and collateralized mortgage obligations will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
 
<TABLE>
<CAPTION>
                                                                          ESTIMATED
                                                              AMORTIZED    MARKET
                                                                COST        VALUE
                                                              ---------   ---------
<S>                                                           <C>         <C>
Due in one year or less.....................................   $ 8,277     $ 8,310
Due after one year through five years.......................    33,064      33,454
Due after five years through ten years......................    12,109      12,373
Due after ten years.........................................    11,862      12,103
                                                               -------     -------
  Total.....................................................   $65,312     $66,240
                                                               =======     =======
</TABLE>
 
                                      F-11
<PAGE>   161
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The following is a summary of proceeds received, gross gains, and gross
losses realized on the sale of investment securities:
 
<TABLE>
<CAPTION>
                                                             1997     1996     1995
                                                            ------   ------   ------
<S>                                                         <C>      <C>      <C>
Proceeds from sales.......................................  $   --   $2,781   $5,759
Gross gains...............................................      --        3       17
Gross losses..............................................      --        2       31
</TABLE>
 
     Investment securities with a carrying value of $38,724 and $38,719 at
December 31, 1997 and 1996, respectively, were pledged to secure deposits and
other purposes as required by law.
 
5. LOANS
 
     Major classifications of loans are summarized as follows:
 
<TABLE>
<CAPTION>
                                                                1997       1996
                                                              --------   --------
<S>                                                           <C>        <C>
Commercial, financial, and agricultural.....................  $ 90,423   $ 78,666
Real estate -- construction.................................    10,262     11,042
Real estate -- mortgage:
  Residential...............................................   123,978    106,081
  Commercial................................................    32,360     18,876
Installment loans to individuals............................    85,777     83,637
Tax exempt loans............................................    23,838     20,385
                                                              --------   --------
                                                               366,638    318,687
Less unearned income........................................    12,717     10,677
                                                              --------   --------
                                                               353,921    308,010
Less allowance for loan losses..............................     4,717      3,234
                                                              --------   --------
     Net loans..............................................  $349,204   $304,776
                                                              ========   ========
</TABLE>
 
     Century's primary business activity is with customers located within its
local trade area. Commercial, residential, personal, and agricultural loans are
granted. Century also selectively funds residential loans originated outside of
its trade area provided such loans meet Century's credit policy guidelines.
Although Century has a diversified loan portfolio, at December 31, 1997 and
1996, loans outstanding to individuals and businesses are dependent upon the
local economic conditions in its immediate trade area.
 
     At December 31, 1997, Century had loans totaling $72 which were past due 90
days or more and still accruing interest. Presented below are total nonaccruing
loans of Century at December 31, 1997, 1996 and 1995. Also shown is the
additional income that would have been earned if those loans had been current
throughout the years ended.
 
<TABLE>
<CAPTION>
                                                               1997    1996   1995
                                                              ------   ----   ----
<S>                                                           <C>      <C>    <C>
Nonaccrual loans............................................  $3,664   $872   $901
Interest earned (if current)................................     346     58     51
</TABLE>
 
     At December 31, 1997, Century had impaired loans of $2,738 for which $356
of the allowance for loan losses had been allocated. There were no impaired
loans without allowance for loan loss allocation as of December 31, 1997. During
the year, Century had an average balance of $2,353 and recognized $7 in interest
income on these loans. Century had no impaired loans as of December 31, 1996.
 
                                      F-12
<PAGE>   162
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
6. ALLOWANCE FOR LOAN LOSSES
 
     Changes in the allowance for loan losses for the years ended December 31,
1997, 1996, and 1995, are as follows:
 
<TABLE>
<CAPTION>
                                                            1997      1996      1995
                                                           ------    ------    ------
<S>                                                        <C>       <C>       <C>
Balance, January 1.......................................  $3,234    $3,003    $3,206
Add:
  Provisions charged to operations.......................   2,070       625       240
  Recoveries.............................................      92        68        32
Less loans charged off...................................     679       462       475
                                                           ------    ------    ------
Balance, December 31.....................................  $4,717    $3,234    $3,003
                                                           ======    ======    ======
</TABLE>
 
7. PREMISES AND EQUIPMENT
 
     Major classifications of premises and equipment are summarized as follows:
 
<TABLE>
<CAPTION>
                                                               1997       1996
                                                              -------    -------
<S>                                                           <C>        <C>
Land and land improvements..................................  $ 2,365    $ 2,526
Buildings...................................................    9,039      7,389
Furniture and equipment.....................................    5,401      4,869
Leasehold improvements......................................      562        523
                                                              -------    -------
                                                               17,367     15,307
Less accumulated depreciation...............................    5,805      5,287
                                                              -------    -------
          Total.............................................  $11,562    $10,020
                                                              =======    =======
</TABLE>
 
     Depreciation expense amounted to $919 in 1997, $852 in 1996, and $767 in
1995.
 
8. DEPOSITS
 
     Time deposits include certificates of deposit in denominations of $100 or
more. Such deposits aggregated $38,309 and $29,492 at December 31, 1997 and
1996, respectively.
 
     Interest expense on certificates of deposit over $100 amounted to $3,241 in
1997, $2,495 in 1996, and $1,863 in 1995.
 
     The following table sets forth the remaining maturity of time certificates
of deposits of $100,000 or more at December 31, 1997.
 
<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                                  1997
                                                              ------------
<S>                                                           <C>
3 months or less............................................    $ 2,687
Over 3 through 6 months.....................................     21,161
Over 6 through 12 months....................................      3,387
Over 12 months..............................................     11,074
                                                                -------
          Total.............................................    $38,309
                                                                =======
</TABLE>
 
                                      F-13
<PAGE>   163
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
9. SHORT-TERM BORROWINGS
 
     The outstanding balances and related information for short-term borrowings
are summarized as follows:
 
<TABLE>
<CAPTION>
                                                         1997               1996
                                                    ---------------    ---------------
                                                    AMOUNT     RATE    AMOUNT     RATE
                                                    -------    ----    -------    ----
<S>                                                 <C>        <C>     <C>        <C>
Balance at year end...............................  $ 4,000    5.07%   $ 7,000    5.71%
Average balance outstanding during the year.......    7,100    5.62      8,965    5.51
Maximum amount outstanding at any month end.......   19,160      --     16,175      --
</TABLE>
 
     Short-term borrowings consist of advances from the Federal Home Loan Bank
of Pittsburgh (FHLB) under a RepoPlus borrowing arrangement. Average amounts
outstanding during the year represent daily average balances and average
interest rates represent interest expense divided by the related average
balance.
 
     Century maintains a revolving line of credit (flexline advance) with the
FHLB. The amount available on this line of credit as of December 31, 1997, is
approximately $8.4 million. Century has pledged, as collateral for advances from
the FHLB of Pittsburgh, all stock in the Federal Home Loan Bank and certain
other qualifying collateral. There were no outstanding balances on this credit
line at December 31, 1997 and 1996.
 
10. OTHER BORROWINGS
 
     Other borrowings as of December 31, 1997 and 1996, are summarized as
follows:
 
<TABLE>
<CAPTION>
              DESCRIPTION                   MATURITY DATE    INTEREST RATE    1997      1996
              -----------                 -----------------  -------------   -------   ------
<S>                                       <C>                <C>             <C>       <C>
Federal Home Loan Bank advance..........  July 11, 2002          5.60%       $20,000   $   --
Federal Home Loan Bank advance..........  February 18, 1998      5.07%            --    4,000
                                                                             -------   ------
  Total.................................                                     $20,000   $4,000
                                                                             =======   ======
</TABLE>
 
     Century has pledged, as collateral for borrowings from the FHLB, all stock
in the FHLB and certain other qualifying collateral.
 
     During 1997, a $4,000 advance maturing February 18, 1998 was reclassified
as short-term borrowings.
 
11. OTHER EXPENSES
 
     The following is an analysis of other expenses:
 
<TABLE>
<CAPTION>
                                                            1997      1996      1995
                                                           ------    ------    ------
<S>                                                        <C>       <C>       <C>
Advertising..............................................  $  355    $  455    $  362
Stationery, printing, and supplies.......................     365       346       307
State shares tax.........................................     309       273       262
Professional fees........................................     604       249       306
Other....................................................   2,731     2,490     2,259
                                                           ------    ------    ------
          Total..........................................  $4,364    $3,813    $3,496
                                                           ======    ======    ======
</TABLE>
 
                                      F-14
<PAGE>   164
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
12. INCOME TAXES
 
     The provision for income taxes consists of:
 
<TABLE>
<CAPTION>
                                                            1997      1996      1995
                                                           ------    ------    ------
<S>                                                        <C>       <C>       <C>
Currently payable........................................  $1,380    $1,210    $1,177
Deferred.................................................    (512)       60       209
                                                           ------    ------    ------
          Total..........................................  $  868    $1,270    $1,386
                                                           ======    ======    ======
</TABLE>
 
     The components of the net deferred tax assets are as follows:
 
<TABLE>
<CAPTION>
                                                               1997     1996
                                                              ------    ----
<S>                                                           <C>       <C>
Deferred Tax Assets
  Allowance for loan losses.................................  $1,342    $838
  Other.....................................................     209     104
                                                              ------    ----
          Total deferred tax assets.........................   1,551     942
                                                              ------    ----
Deferred Tax Liabilities
  Premises and equipment....................................     184     153
  Net unrealized gain on securities.........................     315     245
  Pension asset.............................................     144     173
  Deferred loan origination fees, net.......................      99      20
  Other.....................................................      73      57
                                                              ------    ----
          Total deferred tax liabilities....................     815     648
                                                              ------    ----
          Net deferred tax assets...........................  $  736    $294
                                                              ======    ====
</TABLE>
 
     No valuation allowance was established at December 31, 1997, in view of the
Corporation's ability to carry back taxes paid in previous years and certain tax
strategies and anticipated future taxable income as evidenced by the
Corporation's earnings potential.
 
     The reconciliation of the federal statutory rate and the Corporation's
effective income tax rate is as follows:
 
<TABLE>
<CAPTION>
                                               1997                1996                1995
                                         -----------------   -----------------   -----------------
                                                    % OF                % OF                % OF
                                                   PRE-TAX             PRE-TAX             PRE-TAX
                                         AMOUNT    INCOME    AMOUNT    INCOME    AMOUNT    INCOME
                                         -------    -----    -------    -----    -------    -----
<S>                                      <C>       <C>       <C>       <C>       <C>       <C>
Provision at statutory rate............  $ 1,731     34.0%   $ 2,100     34.0%   $ 1,922     34.0%
Effect of tax free income..............   (1,024)   (20.1)      (880)   (14.3)      (672)   (11.9)
Non-deductible interest expense........       95      1.9         74      1.2         61      1.1
Other, net.............................       66      1.3        (24)    (0.3)        75      1.3
                                         -------    -----    -------    -----    -------    -----
Actual provision and effective rate....  $   868     17.1%   $ 1,270     20.6%   $ 1,386     24.5%
                                         =======    =====    =======    =====    =======    =====
</TABLE>
 
13. PENSION AND PROFIT SHARING PLANS
 
     Century sponsors a trusteed, non-contributory defined benefit pension plan
covering substantially all employees and officers of Century. The plan calls for
benefits to be paid to eligible employees at retirement based primarily on years
of service and compensation rates near retirement. Contributions are intended to
provide not only benefits for attributed to service to date but also for those
expected to be earned in the future.
 
                                      F-15
<PAGE>   165
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The following presents the components of the net periodic pension cost:
 
<TABLE>
<CAPTION>
                                                              1997     1996    1995
                                                             -------   -----   -----
<S>                                                          <C>       <C>     <C>
Service costs of the current period........................  $   270   $ 247   $ 264
Interest cost on projected benefit obligations.............      375     341     298
Actual return on plan assets...............................   (1,219)   (677)     78
Net amortization and deferral..............................      708     228    (424)
                                                             -------   -----   -----
  Total....................................................  $   134   $ 139   $ 216
                                                             =======   =====   =====
</TABLE>
 
     The actuarial present value of the accumulated benefit obligation at
December 31, 1997 and 1996, was $4,224 and $3,327 including vested benefit
obligations of $4,177 and $3,287. The following sets forth the funded status of
the plan and the amounts recognized in the accompanying consolidated balance
sheet:
 
<TABLE>
<CAPTION>
                                                               1997      1996
                                                              -------   -------
<S>                                                           <C>       <C>
Plan assets at fair value...................................  $ 7,221   $ 6,111
Actuarial present value of projected benefit obligation.....   (6,020)   (5,071)
                                                              -------   -------
Funded status...............................................    1,201     1,040
Unrecognized transition amount..............................     (233)     (291)
Unrecognized net gain from past experience different from
  that assumed and effects of changes in assumptions........     (569)     (266)
                                                              -------   -------
Pension asset...............................................  $   399   $   483
                                                              =======   =======
</TABLE>
 
     Assumptions used in determining net periodic pension cost are as follows:
 
<TABLE>
<CAPTION>
                                                              1997   1996   1995
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Discount rate...............................................  7.50%  7.50%  7.50%
Expected long-term rate of return on assets.................  7.50   7.50   7.50
Rate of increase in compensation levels.....................  4.50   4.00   5.00
</TABLE>
 
     Century makes payments to a qualified profit sharing plan covering
substantially all employees and officers of Century. Contributions to the plan
are made at the discretion of the Board of Directors and are determined annually
based on the achievement of pre-determined performance goals. The plan
contributions for the years 1997, 1996, and 1995 amounted to $476, $482, and
$386, respectively.
 
14. DIVIDEND REINVESTMENT PLAN
 
     The Corporation maintains a Dividend Reinvestment Plan (the "Plan") whereby
up to 300,000 authorized but unissued shares were allocated for dividend
reinvestment. Participation in the Plan is available to all common stockholders
who may elect to reinvest dividends on all or part of their shares to acquire
additional common stock of the Corporation. Plan participants are able to
withdraw from the Plan at any time. At December 31, 1997 and 1996, there were
16,561 and 20,490 shares being held in treasury which will be used in
conjunction with the Plan. During 1997 and 1996, there were 13,864 and 13,028
shares issued under the Plan.
 
15. COMMITMENTS AND CONTINGENT LIABILITIES
 
  COMMITMENTS
 
     In the normal course of business, there are various outstanding commitments
and certain contingent liabilities which are not reflected in the accompanying
consolidated financial statements. These commitments and contingent liabilities
represent financial instruments with off-balance sheet risk. The contract or
notional amounts
 
                                      F-16
<PAGE>   166
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
of those instruments reflect the extent of involvement in particular types of
financial instruments which were comprised of the following:
 
<TABLE>
<CAPTION>
                                                               1997      1996
                                                              -------   -------
<S>                                                           <C>       <C>
Commitments to extend credit................................  $35,799   $32,115
Standby letters of credit...................................    3,194       341
                                                              -------   -------
  Total.....................................................  $38,993   $32,456
                                                              =======   =======
</TABLE>
 
     The instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the balance sheet. The
same credit policies are used in making commitments and conditional obligations
as for on-balance sheet instruments. Generally, collateral is required to
support financial instruments with credit risk. The terms are typically for a
one-year period with an annual renewal option subject to prior approval by
management.
 
     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the loan agreement.
These commitments are comprised primarily of available commercial and personal
lines of credit. Standby letters of credit written are conditional commitments
issued to guarantee the performance of a customer to a third party.
 
     The exposure to loss under these commitments are limited by subjecting them
to credit approval and monitoring procedures. Substantially all of the
commitments to extend credit are contingent upon customers maintaining specific
credit standards at the time of the loan funding. Management assesses the credit
risk associated with certain commitments to extend credit in determining the
level of the allowance for loan losses. Since many of the commitments are
expected to expire without being drawn upon, the contractual amounts do not
necessarily represent future funding requirements.
 
     At December 31, 1997, the minimum rental commitments for all non-cancelable
leases are as follows (in thousands):
 
<TABLE>
<S>                                                           <C>
1998........................................................  $  172
1999........................................................     169
2000........................................................     167
2001........................................................     152
2002........................................................      76
2003 and thereafter.........................................     545
                                                              ------
  Total.....................................................  $1,281
                                                              ======
</TABLE>
 
     Occupancy and equipment expenses include rental expenditures of $188 for
1997, $133 for 1996, and $134 for 1995.
 
  CONTINGENT LIABILITIES
 
     The Corporation and its subsidiary are involved in legal actions from
normal business activities which includes a lawsuit initiated by a former
employee alleging wrongful discharge. Management believes that the liability, if
any, arising from such actions will not have a material adverse effect on the
Corporation's financial position.
 
16. STOCK OPTION PLAN
 
     The Corporation maintains an incentive stock option plan under which
336,204 shares of common stock can be issued after adjusting for the stock
splits in May 1997, December 1994, and April 1993. The plan provides for the
grant of incentive stock options to certain executive officers, senior
management personnel, and directors of the Corporation. Under the plan, a holder
may elect to exercise options to purchase common stock at fixed prices
 
                                      F-17
<PAGE>   167
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
equal to the fair value at the date of grant. The period for exercising options
is fixed at the date of the grant and will not exceed ten years from such date.
 
     Effective January 1, 1996, the Corporation adopted Statement of Financial
Accounting Standards Statement No. 123, "Accounting for Stock-Based
Compensation." This statement encourages, but does not require the Corporation
to recognize compensation expense for all awards of equity instruments issued
after December 31, 1994. The statement establishes a fair value based method of
accounting for stock-based compensation plans. The standard applies to all
transactions in which an entity acquires goods or services by issuing equity
instruments or by incurring liabilities in amounts based on the price of the
entity's common stock or other equity instruments. Statement No. 123 permits
companies to continue to account for such transactions under Accounting
Principles Board No. 25, "Accounting for Stock Issued to Employees," but
requires disclosure in a note to the financial statements pro forma net income
and earnings per share as if the Corporation had applied the new method of
accounting.
 
     Under APB Opinion 25, no compensation expense has been recognized with
respect to the options granted under the stock option plan. Had compensation
expense been determined on the basis of fair value pursuant to Statement No.
123, net income and earnings per share would have been reduced as follows:
 
<TABLE>
<CAPTION>
                                                      1997      1996      1995
                                                     ------    ------    ------
<S>                                                  <C>       <C>       <C>
Net Income:
  As reported......................................  $4,222    $4,906    $4,268
                                                     ======    ======    ======
  Pro forma........................................  $2,723    $4,749    $4,162
                                                     ======    ======    ======
Basic Earnings Per Share:
  As reported......................................  $ 0.83    $ 0.97    $ 0.84
                                                     ======    ======    ======
  Pro forma........................................  $ 0.54    $ 0.94    $ 0.82
                                                     ======    ======    ======
Diluted Earnings Per Share:
  As reported......................................  $ 0.82    $ 0.96    $ 0.84
                                                     ======    ======    ======
  Pro forma........................................  $ 0.53    $ 0.93    $ 0.82
                                                     ======    ======    ======
</TABLE>
 
     The following table presents share data related to the stock option plan:
 
<TABLE>
<CAPTION>
                                                            SHARES UNDER OPTION
                                                            --------------------
                                                              1997        1996
                                                            --------    --------
<S>                                                         <C>         <C>
Outstanding, January 1....................................  246,327     194,459
  Granted.................................................   55,059      63,852
  Exercised...............................................  (53,666)    (10,433)
  Forfeited...............................................     (579)     (1,551)
                                                            -------     -------
Outstanding, December 31 (at prices ranging from $7.06
  -$11.33)................................................  247,141     246,327
                                                            =======     =======
</TABLE>
 
17. REGULATORY MATTERS
 
     The approval of the Comptroller of the Currency is required if the total of
all dividends declared by a national bank in any calendar year exceeds net
profits as defined for that year combined with its retained net profits for the
two preceding calendar years less any required transfers to surplus. Under this
formula, the amount available for payment of dividends by Century to the
Corporation in 1998, without the approval of the Comptroller, is $5,118 plus
1998 profits retained up to the date of the dividend declaration.
 
                                      F-18
<PAGE>   168
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Included in cash and due from banks are required federal reserves of $4,073
and $3,159 at December 31, 1997 and 1996, respectively, for facilitating the
implementation of monetary policy by the Federal Reserve System. The required
reserves are computed by applying prescribed ratios to the classes of average
deposit balances. These are held in the form of cash on hand and/or balances
maintained directly with the Federal Reserve Bank.
 
18. REGULATORY CAPITAL REQUIREMENTS
 
     The Corporation (on a consolidated basis) and Century are subject to
various regulatory capital requirements administered by the federal banking
agencies. Failure to meet minimum capital requirements can initiate certain
mandatory, and possibly additional discretionary actions by the regulators that,
if undertaken, could have a direct material effect on the Corporation's and
Century's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, both entities must meet
specific capital guidelines that involve quantitative measures of the their
assets, liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. The capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.
 
     Quantitative measures established by the regulation to ensure capital
adequacy require Century to maintain minimum amounts and ratios of total Tier I
capital (as defined in the regulations) to risk-weighted assets (as defined),
and of Tier I capital to average assets (as defined). Management believes, as of
December 31, 1997 and 1996, that the Corporation and Century meet all capital
adequacy requirements to which they are subject.
 
     As of December 31, 1997, the most recent notification from the appropriate
regulatory authorities, has categorized the Corporation and Century as well
capitalized under the regulatory framework for prompt corrective action. To be
categorized as well capitalized, an entity must maintain minimum Total
Risk-Based, Tier I Risk-Based and Tier I Leverage ratios at least 100 to 200
basis points above those ratios set forth in the table. There have been no
conditions or events since that notification that management believes have
changed the this category. The capital position of the Corporation does not
materially differ from Century's, therefore, the following table sets forth the
Corporation's capital position and minimum requirements as of December 31:
 
<TABLE>
<CAPTION>
                                                            1997                 1996
                                                      -----------------    -----------------
                                                      AMOUNT     RATIO     AMOUNT     RATIO
                                                      -------    ------    -------    ------
<S>                                                   <C>        <C>       <C>        <C>
Total Capital
  (to Risk-Weighted Assets)
     Actual.........................................  $40,296    11.66%    $36,643    11.95%
     For Capital Adequacy...........................   27,656     8.00%     24,522     8.00%
     To Be Well Capitalized.........................   34,570    10.00%     30,653    10.00%
Tier I Capital (to Risk-Weighted Assets)
     Actual.........................................  $35,970    10.40%    $33,409    10.90%
     For Capital Adequacy...........................   13,828     4.00%     12,261     4.00%
     To Be Well Capitalized.........................   20,742     6.00%     18,391     6.00%
Tier I Capital
  (to Average Assets)
     Actual.........................................  $35,970     7.80%    $33,409     8.25%
     For Capital Adequacy...........................   18,449     4.00%     16,208     4.00%
     To Be Well Capitalized.........................   23,062     5.00%     20,248     5.00%
</TABLE>
 
19. FAIR VALUE DISCLOSURE
 
     The estimated fair values at December 31, 1997 and 1996, of the
Corporation's financial instruments are as follows:
 
                                      F-19
<PAGE>   169
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
<TABLE>
<CAPTION>
                                                          1997                    1996
                                                  --------------------    --------------------
                                                  CARRYING      FAIR      CARRYING      FAIR
                                                   VALUE       VALUE       VALUE       VALUE
                                                  --------    --------    --------    --------
<S>                                               <C>         <C>         <C>         <C>
Financial assets:
  Cash and due from banks.......................  $ 12,439    $ 12,439    $ 12,661    $ 12,661
  Interest-bearing deposits in other banks......     1,645       1,645         343         343
  Federal funds sold............................    11,235      11,235       8,790       8,790
  Investment securities available for sale......    67,647      67,647      71,873      71,873
  Net loans.....................................   349,204     344,142     304,776     298,264
  Accrued interest receivable...................     2,563       2,563       2,276       2,276
                                                  --------    --------    --------    --------
     Total......................................  $444,733    $439,671    $400,719    $394,207
                                                  ========    ========    ========    ========
Financial liabilities:
  Deposits......................................  $392,926    $396,186    $363,394    $364,615
  Short term borrowings.........................     4,000       4,000       7,000       7,000
  Other borrowings..............................    20,000      20,132       4,000       3,957
  Accrued interest payable......................     2,586       2,586       1,971       1,971
                                                  --------    --------    --------    --------
     Total......................................  $419,512    $422,904    $376,365    $377,543
                                                  ========    ========    ========    ========
</TABLE>
 
     Financial instruments are defined as cash, evidence of an ownership
interest in an entity, or a contract which creates an obligation or right to
receive or deliver cash or another financial instrument from/to a second entity
on potentially favorable or unfavorable terms.
 
     Fair value is defined as the amount at which a financial instrument could
be exchanged in a current transaction between willing parties other than in a
forced or liquidation sale. If a quoted market price is available for a
financial instrument, the estimated fair value would be calculated based upon
the market price per trading unit of the instrument.
 
     If no readily available market exits, the fair value estimates for
financial instruments should be based upon management's judgment regarding
current economic conditions, interest rate risk, expected cash flows, future
estimated losses and other factors as determined through various option pricing
formulas or simulation modeling. As many of these assumptions result from
judgments made by management based upon estimates which are inherently
uncertain, the resulting estimated fair values may not be indicative of the
amount realizable in the sale of a particular financial instrument. In addition,
changes in the assumptions on which the estimated fair values are based may have
a significant impact on the resulting estimated fair values.
 
     As certain assets such as deferred tax assets and premises and equipment
are not considered financial instruments, the estimated fair value of financial
instruments would not represent the full value of the Corporation.
 
     The Corporation employed simulation modeling in determining the estimated
fair value of financial instruments for which quoted market prices were not
available based upon the following assumptions:
 
 CASH AND DUE FROM BANKS, INTEREST-BEARING DEPOSIT WITH OTHER BANKS, ACCRUED
 INTEREST RECEIVABLE, SHORT TERM BORROWINGS, AND ACCRUED INTEREST PAYABLE
 
     The fair value is equal to the current carrying value.
 
  INVESTMENT SECURITIES AVAILABLE FOR SALE
 
     The fair value of securities available for sale is equal to the available
quoted market price. If no quoted market price is available, fair value is
estimated using the quoted market price for similar securities.
 
                                      F-20
<PAGE>   170
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
  LOANS, DEPOSITS, AND OTHER BORROWINGS
 
     The fair value of loans is estimated by discounting the future cash flows
using a simulation model which estimates future cash flows and constructs
discount rates that consider reinvestment opportunities, operating expenses,
non-interest income, credit quality, and prepayment risk. Demand, savings, and
money market deposit accounts are valued at the amount payable on demand as of
year end. Fair values for time deposits and other borrowings are estimated using
a discounted cash flow calculation that applies contractual costs currently
being offered in the existing portfolio to current market rates being offered
for deposits and borrowings of similar remaining maturities.
 
  COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT
 
     These financial instruments are generally not subject to sale, and
estimated fair values are not readily available. The carrying value, represented
by the net deferred fee arising from the unrecognized commitment or letter of
credit, and the fair value, determined by discounting the remaining contractual
fee over the term of the commitment using fees currently charged to enter into
similar agreements with similar credit risk, are not considered material for
disclosure. The contractual amounts of unfunded commitments and letters of
credit are presented in Note 14.
 
20. AGREEMENT AND PLAN OF MERGER
 
     On December 3, 1997, the Board of Directors executed a definitive Agreement
and Plan of Merger (the Agreement), which provides for the affiliation of the
Corporation with Citizens Bancshares, Inc. (Citizens) headquartered in
Salineville, Ohio. The Agreement provides that the affiliation will be effected
by means of a merger of the Corporation and Citizens. In the merger, each
stockholder of the Corporation will receive 0.425 shares of Citizens common
stock in exchange for each share of the Corporation's stock, subject to certain
terms, conditions, and limitations set forth in the Agreement.
 
     Completion of the merger is subject to approval by various regulatory
agencies and the stockholders of the Corporation and Citizens.
 
                                      F-21
<PAGE>   171
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
21. SELECTED QUARTERLY FINANCIAL DATA
 
     The unaudited quarterly results for 1997 and 1996 are summarized as
follows:
 
<TABLE>
<CAPTION>
                                                                        1997
                                               ------------------------------------------------------
                                                                 THREE MONTHS ENDED
                                               ------------------------------------------------------
                                               MARCH 31,    JUNE 30,    SEPTEMBER 30,    DECEMBER 31,
                                               ---------    --------    -------------    ------------
<S>                                            <C>          <C>         <C>              <C>
Total interest income........................   $8,101       $8,415        $9,018           $9,108
Total Interest expense.......................    3,873        4,031         4,647            4,695
                                                ------       ------        ------           ------
Net interest income..........................    4,228        4,384         4,371            4,413
Provision for loan losses....................      195          195           240            1,440
                                                ------       ------        ------           ------
Net interest income after provision for loan
  losses.....................................    4,033        4,189         4,131            2,973
                                                ------       ------        ------           ------
Other income.................................      752          773           781              853
Other expense................................    3,113        3,375         3,070            3,837
                                                ------       ------        ------           ------
Income before income taxes...................    1,672        1,587         1,842              (11)
Income taxes (benefit).......................      370          334           336             (172)
                                                ------       ------        ------           ------
Net income...................................   $1,302       $1,253        $1,506           $  161
                                                ======       ======        ======           ======
Earnings per share:
  Basic......................................   $ 0.26       $ 0.25        $ 0.30           $ 0.03
  Dilutive...................................   $ 0.25       $ 0.24        $ 0.29           $ 0.03
</TABLE>
 
<TABLE>
<CAPTION>
                                                                        1996
                                               ------------------------------------------------------
                                                                 THREE MONTHS ENDED
                                               ------------------------------------------------------
                                               MARCH 31,    JUNE 30,    SEPTEMBER 30,    DECEMBER 31,
                                               ---------    --------    -------------    ------------
<S>                                            <C>          <C>         <C>              <C>
Total interest income........................   $7,397       $7,441        $7,762           $7,964
Total Interest expense.......................    3,383        3,240         3,486            3,757
                                                ------       ------        ------           ------
Net interest income..........................    4,014        4,201         4,276            4,207
Provision for loan losses....................      105          130           180              210
                                                ------       ------        ------           ------
Net interest income after provision for loan
  losses.....................................    3,909        4,071         4,096            3,997
                                                ------       ------        ------           ------
Other income.................................      647          667           663              739
Other expense................................    3,020        3,221         3,205            3,167
                                                ------       ------        ------           ------
Income before income taxes...................    1,536        1,517         1,554            1,569
Income taxes.................................      358          389           257              266
                                                ------       ------        ------           ------
Net income...................................   $1,178       $1,128        $1,297           $1,303
                                                ======       ======        ======           ======
Earnings per share:
  Basic......................................   $ 0.23       $ 0.22        $ 0.26           $ 0.26
  Dilutive...................................   $ 0.23       $ 0.22        $ 0.25           $ 0.26
</TABLE>
 
                                      F-22
<PAGE>   172
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
22. PARENT COMPANY
 
     Following are condensed financial statements for the Corporation.
 
                            CONDENSED BALANCE SHEET
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               1997       1996
                                                              -------    -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
ASSETS
  Cash......................................................  $   365    $   159
  Investment in bank subsidiary.............................   36,420     33,831
  Other.....................................................      484        568
                                                              -------    -------
          TOTAL ASSETS......................................  $37,269    $34,558
                                                              =======    =======
LIABILITIES
  Dividends payable.........................................  $   561    $   504
  Other.....................................................       --         18
STOCKHOLDERS' EQUITY........................................   36,708     34,036
                                                              -------    -------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........  $37,269    $34,558
                                                              =======    =======
</TABLE>
 
                         CONDENSED STATEMENT OF INCOME
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                           --------------------------
                                                            1997      1996      1995
                                                           ------    ------    ------
                                                                 (IN THOUSANDS)
<S>                                                        <C>       <C>       <C>
INCOME
  Dividends from bank subsidiary.........................  $1,800    $2,290    $1,905
  Other..................................................       1         6       205
EXPENSES
  Other..................................................      44        80       219
                                                           ------    ------    ------
          Income before income taxes.....................   1,757     2,216     1,891
Income tax benefit.......................................     (12)      (25)       (5)
                                                           ------    ------    ------
          Income before equity in undistributed net
            income of subsidiaries.......................   1,769     2,241     1,896
Equity in undistributed net income of subsidiaries.......   2,453     2,665     2,372
                                                           ------    ------    ------
NET INCOME...............................................  $4,222    $4,906    $4,268
                                                           ======    ======    ======
</TABLE>
 
                                      F-23
<PAGE>   173
                         CENTURY FINANCIAL CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
                       CONDENSED STATEMENT OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              -----------------------------
                                                               1997       1996       1995
                                                              -------    -------    -------
                                                                     (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
OPERATING ACTIVITIES
  Net income................................................  $ 4,222    $ 4,906    $ 4,268
  Adjustments to reconcile net income to net cash provided
     by operating activities:
       Equity in undistributed net income of subsidiaries...   (2,453)    (2,665)    (2,372)
       Other, net...........................................      230       (101)      (126)
                                                              -------    -------    -------
          Net cash provided by operating activities.........    1,999      2,140      1,770
                                                              -------    -------    -------
FINANCING ACTIVITIES
  Cash dividends............................................   (2,128)    (1,887)    (1,790)
  Proceeds from stock options exercised.....................      447         79        127
  Treasury stock purchase...................................     (351)      (522)      (125)
  Proceeds from employee stock purchase plan................       22         --         --
  Proceeds from dividend reinvestment plan..................      217        205        107
                                                              -------    -------    -------
          Net cash used for financing activities............   (1,793)    (2,125)    (1,681)
                                                              -------    -------    -------
          Increase in cash..................................      206         15         89
CASH AT BEGINNING OF YEAR...................................      159        144         55
                                                              -------    -------    -------
CASH AT END OF YEAR.........................................  $   365    $   159    $   144
                                                              =======    =======    =======
</TABLE>
 
                                      F-24
<PAGE>   174
 
                PART II   INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
 
     Section 1701.13(E) of the Ohio Revised Code grants corporations broad
powers to indemnify directors, officers, employees and agents. Section
1701.13(E) provides:
 
          (E)(1) A corporation may indemnify or agree to indemnify any person
     who was or is a party, or is threatened to be made a party, to any
     threatened, pending, or completed action, suit, or proceeding, whether
     civil, criminal, administrative, or investigative, other than an action by
     or in the right of the corporation, by reason of the fact that he is or was
     a director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against expenses,
     including attorney's fees, judgments, fines, and amounts paid in settlement
     actually and reasonably incurred by him in connection with such action,
     suit, or proceeding, if he acted in good faith and in a manner he
     reasonably believed to be in or not opposed to the best interests of the
     corporation, and, with respect to any criminal action or proceeding, if he
     had no reasonable cause to believe his conduct was unlawful. The
     termination of any action, suit, or proceeding by judgment, order,
     settlement, or conviction, or upon a plea of nolo contendere or its
     equivalent, shall not, of itself, create a presumption that the person did
     not act in good faith and in a manner he reasonably believed to be in or
     not opposed to the best interests of the corporation, and, with respect to
     any criminal action or proceeding, he had reasonable cause to believe that
     his conduct was unlawful.
 
          (2) A corporation may indemnify or agree to indemnify any person who
     was or is a party, or is threatened to be made a party, to any threatened,
     pending, or completed action or suit by or in the right of the corporation
     to procure a judgment in its favor, by reason of the fact that he is or was
     a director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against expenses,
     including attorney's fees, actually and reasonably incurred by him in
     connection with the defense or settlement of such action or suit, if he
     acted in good faith and in a manner he reasonably believed to be in or not
     opposed to the best interests of the corporation, except that no
     indemnification shall be made in respect of any of the following:
 
             (a) Any claim, issue, or matter as to which such person is adjudged
        to be liable for negligence or misconduct in the performance of his duty
        to the corporation unless, and only to the extent that, the court of
        common pleas or the court in which such action or suit was brought
        determines, upon application, that, despite the adjudication of
        liability, but in view of all the circumstances of the case, such person
        is fairly and reasonably entitled to indemnity for such expenses as the
        court of common pleas or such other court shall deem proper;
 
             (b) Any action or suit in which the only liability asserted against
        a director is pursuant to section 1701.95 of the Revised Code.
 
          (3) To the extent that a director, trustee, officer, employee, member,
     manager, or agent has been successful on the merits or otherwise in defense
     of any action, suit, or proceeding referred to in division (E)(1) or (2) of
     this section, or in defense of any claim, issue, or matter therein, he
     shall be indemnified against expenses, including attorney's fees, actually
     and reasonably incurred by him in connection with the action, suit, or
     proceeding.
 
          (4) Any indemnification under division (E)(1) or (2) of this section,
     unless ordered by a court, shall be made by the corporation only as
     authorized in the specific case, upon a determination that indemnification
     of the director, trustee, officer, employee, member, manager, or agent is
     proper in the circumstances because he
 
                                      II-1
<PAGE>   175
 
     has met the applicable standard of conduct set forth in division (E)(1) or
     (2) of this section. Such determination shall be made as follows:
 
             (a) By a majority vote of a quorum consisting of directors of the
        indemnifying corporation who were not and are not parties to or
        threatened with the action, suit, or proceeding referred to in division
        (E)(1) or (2) of this section;
 
             (b) If the quorum described in division (E)(4)(a) of this section
        is not obtainable or if a majority vote of a quorum of disinterested
        directors so directs, in a written opinion by independent legal counsel
        other than an attorney, or a firm having associated with it an attorney,
        who has been retained by or who has performed services for the
        corporation or any person to be indemnified within the past five years;
 
             (c) By the shareholders;
 
             (d) By the court of common pleas or the court in which the action,
        suit, or proceeding referred to in division (E)(1) or (2) of this
        section was brought.
 
          Any determination made by the disinterested directors under division
     (E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
     section shall be promptly communicated to the person who threatened or
     brought the action or suit by or in the right of the corporation under
     division (E)(2) of this section, and, within ten days after receipt of such
     notification, such person shall have the right to petition the court of
     common pleas or the court in which such action or suit was brought to
     review the reasonableness of such determination.
 
          (5)(a) Unless at the time of a director's act or omission that is the
     subject of an action, suit, or proceeding referred to in division (E)(1) or
     (2) of this section, the articles or the regulations of a corporation
     state, by specific reference to this division, that the provisions of this
     division do not apply to the corporation and unless the only liability
     asserted against a director in an action, suit, or proceeding referred to
     in division (E)(1) or (2) of this section is pursuant to section 1701.95 of
     the Revised Code, expenses, including attorney's fees, incurred by a
     director in defending the action, suit, or proceeding shall be paid by the
     corporation as they are incurred, in advance of the final disposition of
     the action, suit, or proceeding upon receipt of an undertaking by or on
     behalf of the director in which he agrees to do both of the following:
 
             (i) Repay such amount if it is proved by clear and convincing
        evidence in a court of competent jurisdiction that his action or failure
        to act involved an act or omission undertaken with deliberate intent to
        cause injury to the corporation or undertaken with reckless disregard
        for the best interests of the corporation;
 
             (ii) Reasonably cooperate with the corporation concerning the
        action, suit, or proceeding.
 
          (b) Expenses, including attorney's fees, incurred by a director,
     trustee, officer, employee, member, manager, or agent in defending any
     action, suit, or proceeding referred to in division (E)(1) or (2) of this
     section, may be paid by the corporation as they are incurred, in advance of
     the final disposition of the action, suit, or proceeding, as authorized by
     the directors in the specific case, upon receipt of an undertaking by or on
     behalf of the director, trustee, officer, employee, member, manager, or
     agent to repay such amount, if it ultimately is determined that he is not
     entitled to be indemnified by the corporation.
 
          (6) The indemnification authorized by this section shall not be
     exclusive of, and shall be in addition to, any other rights granted to
     those seeking indemnification under the articles, the regulations, any
     agreement, a vote of shareholders or disinterested directors, or otherwise,
     both as to action in their official capacities and as to action in another
     capacity while holding their offices or positions, and shall continue as to
     a person who has ceased to be a director, trustee, officer, employee,
     member, manager, or agent and shall inure to the benefit of the heirs,
     executors, and administrators of such a person.
 
          (7) A corporation may purchase and maintain insurance or furnish
     similar protection, including, but not limited to, trust funds, letters of
     credit, or self-insurance, on behalf of or for any person who is or was a
     director, officer, employee, or agent of the corporation, or is or was
     serving at the request of the corporation as a director, trustee, officer,
     employee, member, manager, or agent of another corporation, domestic or
 
                                      II-2
<PAGE>   176
 
     foreign, nonprofit or for profit, a limited liability company, or a
     partnership, joint venture, trust, or other enterprise, against any
     liability asserted against him and incurred by him in any such capacity, or
     arising out of his status as such, whether or not the corporation would
     have the power to indemnify him against such liability under this section.
     Insurance may be purchased from or maintained with a person in which the
     corporation has a financial interest.
 
          (8) The authority of a corporation to indemnify persons pursuant to
     division (E)(1) or (2) of this section does not limit the payment of
     expenses as they are incurred, indemnification, insurance, or other
     protection that may be provided pursuant to divisions (E)(5), (6), and (7)
     of this section. Divisions (E)(1) and (2) of this section do not create any
     obligation to repay or return payments made by the corporation pursuant to
     division (E)(5), (6), or (7).
 
          (9) As used in division (E) of this section, "corporation" includes
     all constituent entities in a consolidation or merger and the new or
     surviving corporation, so that any person who is or was a director,
     officer, employee, trustee, member, manager, or agent of such a constituent
     entity, or is or was serving at the request of such constituent entity as a
     director, trustee, officer, employee, member, manager, or agent of another
     corporation, domestic or foreign, nonprofit or for profit, a limited
     liability company, or a partnership, joint venture, trust, or other
     enterprise, shall stand in the same position under this section with
     respect to the new or surviving corporation as he would if he had served
     the new or surviving corporation in the same capacity.
 
     Section 33 of the Regulations of Citizens Bancshares, Inc. states as
follows:
 
     Section 33. Indemnification.  The Corporation shall indemnify any director
or officer and any former director or officer of the Corporation and any such
director or officer who is or has served at the request of the Corporation as a
director, officer or trustee of another corporation, partnership, joint venture,
trust or other enterprise (and his heirs, executors and administrators) against
expenses, including attorney's fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him by reason of the fact that
he is or was such director, officer or trustee in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by
applicable law. The indemnification provided for herein shall not be deemed to
restrict the power of the Corporation (i) to indemnify employees, agents and
others to the extent not prohibited by law, (ii) to purchase and maintain
insurance or furnish similar protection on behalf of or for any person who is or
was a director, officer or employee of the Corporation, or any person who is or
was serving at the request of the Corporation as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or incurred by him
in any such capacity or arising out of his status as such, and (iii) to enter
into agreements with persons of the class identified in clause (ii) above
indemnifying them against any and all liabilities (or such lesser
indemnification as may be provided in such agreements) asserted against or
incurred by them in such capacities.
 
     In addition, Bancshares has entered into indemnification agreements with
each of its directors and executive officers which expand the indemnitees'
rights in the event that Ohio law and Bancshares' Regulations are further
changed. Pursuant to the agreements, indemnitees receive the highest available
of the following: (i) the benefits provided by Bancshares' Regulations as of the
date of the agreement; (ii) the benefits provided by Bancshares' Regulations in
effect at the time that indemnification expenses are incurred; (iii) the
benefits allowable under Ohio law which is in effect on the date of the
agreement; (iv) the benefits allowable under the law of the jurisdiction under
which Bancshares exists at the time indemnifiable expenses are incurred; (v) the
benefits available under liability insurance obtained by Bancshares; (vi) the
benefits which would have been available to the indemnitee under a Bancshares
insurance policy which was in effect prior to and expired on May 8, 1986; or
(vii) such other benefits are or may be otherwise available to the indemnitee.
The indemnification rights available under the agreements are subject to certain
exclusions, including a provision that no indemnification shall be made if a
court determines by clear and convincing evidence that the indemnitee has acted
or failed to act with deliberate intent to cause injury to, or with reckless
disregard for the best interests of, Bancshares.
 
                                      II-3
<PAGE>   177
 
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
     The following exhibits are being filed as part of this Registration
Statement:
 
<TABLE>
<CAPTION>
EXHIBIT NO.                             EXHIBIT
- -----------                             -------
<C>           <S>
 
    (2)       Agreement and Plan of Merger, dated December 3, 1997, by and
              between Citizens Bancshares, Inc. and Century Financial
              Corporation, including a list of omitted schedules and
              exhibits and an undertaking of the registrant to furnish
              supplementally a copy of any such omitted schedule or
              exhibit to the Securities and Exchange Commission upon
              request (included as Appendix A to the Prospectus).
 
    (3)       Articles of Incorporation and By-Laws
              (3.1)  Registrant's Fourth Amended Articles of Incorporation
              (incorporated by reference to Exhibit 3(1) to the Form 10-K
                     of Registrant for the year ended December 31, 1996.)
              (3.2)  Registrant's Code of Regulations, as amended
              (incorporated by reference to Exhibit 3(2) to the Form S-4
                     Registration Statement No. 0-18209 of Registrant).
 
    (5)       Opinion of Squire, Sanders & Dempsey L.L.P. regarding
              legality.
 
   (10)       Material Contracts (Exhibits 10(1)-(16) of Registrant's
              Annual Report on Form 10-K for the Year Ended December 31,
              1997 are incorporated herein by reference).
 
   (13)       Registrant's Annual Report to Shareholders for the Fiscal
              Year Ended December 31, 1997 (incorporated by reference to
              Exhibit 13 to Registrant's Form 10-K for the Fiscal Year
              Ended December 31, 1997).
 
   (21)       Subsidiaries of the Registrant.
 
   (23)       Consents of Experts and Counsel
              (23.1) Consent of Squire, Sanders & Dempsey L.L.P. (included
                     in Exhibit 5).
              (23.2) Consent of Danielson Associates Inc.
              (23.3) Consent of Sandler O'Neill & Partners, L.P.
              (23.4) Consent of Independent Public Accountants.
              (23.5) Consent of Independent Auditors.
 
   (27)       Financial Data Schedule (incorporated by reference to
              Exhibit 27 to the Registrant's Annual Report on Form 10-K
              for the Fiscal Year Ended December 31, 1997).
 
   (99)       Additional Exhibits
              (99.1) Century's Form of Proxy
              (99.2) Bancshares' Form of Proxy
              (99.3) Fairness opinion dated November 17, 1997 delivered by
              Danielson Associates, Inc. (included as Appendix D to the
                     Prospectus).
              (99.4) Fairness opinion dated             , 1998 delivered
              by Sandler O'Neill & Partners, L.P. (included as Appendix E
                     to the Prospectus).
</TABLE>
 
ITEM 22. UNDERTAKINGS
 
     The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
 
     The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3
 
                                      II-4
<PAGE>   178
 
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
information.
 
     The undersigned registrant hereby undertakes as follows: That prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
 
     The registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
 
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant, will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
 
     The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of registration statement through the
date of responding to the request.
 
     The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
 
                                      II-5
<PAGE>   179
 
                                   SIGNATURES
 
     Pursuant to the requirements of the 1933 Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Salineville, Ohio on March 4, 1998.
 
                                            CITIZENS BANCSHARES, INC.
 
                                            By: /s/ MARTY E. ADAMS
 
                                              ----------------------------------
                                              Marty E. Adams,
                                              President and Chief Executive
                                                Officer
 
     Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
 
<TABLE>
<S>                                                    <C>
/s/ MARTY E. ADAMS                                     March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Marty E. Adams, President, Chief Executive Officer     Date
and Director
 
/s/ WILLIAM L. WHITE                                   March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
William L. White, III                                  Date
Chief Financial Officer and
Principal Accounting Officer
 
/s/ JAMES C. MCBANE                                    March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
James C. McBane, Director                              Date
 
/s/ FRED H. JOHNSON, III                               March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Fred H. Johnson, III, Director                         Date
 
/s/ KEITH D. BURGETT                                   March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Keith D. Burgett, Director                             Date
 
/s/ WILLARD L. DAVIS                                   March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Willard L. Davis, Director                             Date
 
/s/ FRED H. JOHNSON                                    March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Fred H. Johnson, Director                              Date
 
/s/ KENNETH E. MCCONNELL                               March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Kenneth E. McConnell, Director                         Date
 
/s/ GLENN F. THORNE                                    March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Glenn F. Thorne, Director                              Date
 
/s/ GERARD P. MASTROIANNI                              March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Gerard P. Mastroianni, Director                        Date
 
/s/ ELDEN L. SURBEY                                    March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Elden L. Surbey, Director                              Date
 
/s/ LEE A. SMITH                                       March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Lee A. Smith, Director                                 Date
of The Citizens Banking Company
 
/s/ JONATHAN A. LEVY                                   March 4, 1998
- -----------------------------------------------------  -----------------------------------------------------
Jonathan A. Levy, Director                             Date
of The Citizens Banking Company
</TABLE>
 
                                      II-6
<PAGE>   180
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT NO.                             EXHIBIT
- -----------                             -------
<C>           <S>
 
     (2)      Agreement and Plan of Merger, dated December 3, 1997, by and
              between Citizens Bancshares, Inc. and Century Financial
              Corporation, including a list of omitted schedules and
              exhibits and an undertaking of the registrant to furnish
              supplementally a copy of any such omitted schedule or
              exhibit to the Securities and Exchange Commission upon
              request (included as Appendix A to the Prospectus).
     (3)      Articles of Incorporation and By-Laws
              (3.1) Registrant's Fourth Amended Articles of Incorporation
              (incorporated by reference to Exhibit 3(1) to the Form 10-K
                    of Registrant for the year ended December 31, 1996.)
              (3.2) Registrant's Code of Regulations, as amended
              (incorporated by reference to Exhibit 3(2) to the Form S-4
                    Registration Statement No. 0-18209 of Registrant).
     (5)      Opinion of Squire, Sanders & Dempsey L.L.P. regarding
              legality.
    (10)      Material Contracts (Exhibits 10(1)-(16) of Registrant's
              Annual Report on Form 10-K for the Year Ended December 31,
              1997 are incorporated herein by reference).
    (13)      Registrant's Annual Report to Shareholders for the Fiscal
              Year Ended December 31, 1997 (incorporated by reference to
              Exhibit 13 to Registrant's Form 10-K for the Fiscal Year
              ended December 31, 1997).
    (21)      Subsidiaries of the Registrant.
    (23)      Consents of Experts and Counsel
              (23.1) Consent of Squire, Sanders & Dempsey L.L.P. (included
                     in Exhibit 5).
              (23.2) Consent of Danielson Associates Inc.
              (23.3) Consent of Sandler O'Neill & Partners, L.P.
              (23.4) Consent of Independent Public Accountants.
              (23.5) Consent of Independent Auditors.
    (27)      Financial Data Schedule (incorporated by reference to
              Exhibit 27 to the Registrant's Annual Report on Form 10-K
              for the Fiscal Year Ended December 31, 1997).
    (99)      Additional Exhibits
              (99.1) Century's Form of Proxy
              (99.2) Bancshares' Form of Proxy
              (99.3) Fairness opinion dated November 17, 1997 delivered by
              Danielson Associates, Inc. (included as Appendix D to the
                     Prospectus).
              (99.4) Fairness opinion dated             , 1998 delivered
              by Sandler O'Neill & Partners, L.P. (included as Appendix E
                     to the Prospectus).
</TABLE>
 
                                      II-7

<PAGE>   1
 
                                   EXHIBIT 5
 
                                            , 1998
 
Citizens Bancshares, Inc.
10 East Main Street
Salineville, Ohio 43945
 
     RE: CITIZENS BANCSHARES, INC./CENTURY FINANCIAL CORPORATION
 
Ladies and Gentlemen:
 
     We have acted as counsel for Citizens Bancshares, Inc., an Ohio corporation
(the "Corporation") in connection with a Registration Statement on Form S-4
(Registration No.          ) (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
with respect to the offer and sale by the Corporation of up to 2,150,889 shares
of its common stock, without par value (the "Shares"), to be issued to
shareholders of Century upon consummation of the merger of Century Financial
Corporation with and into the Corporation, all as further described in the
Registration Statement.
 
     We have reviewed the Registration Statement and the exhibits thereto and
have examined such other documents and matters of law as we have deemed
necessary for the purposes of this opinion. In rendering this opinion, we have
assumed there will be no changes in applicable law between the date of this
opinion and any date of issuance or delivery of the Shares.
 
     Based upon the foregoing, it is our opinion that when issued and sold in
the manner described in the Registration Statement (including all exhibits
thereto) and in compliance with the Securities Act of 1933, as amended, and all
applicable state securities laws, (i) the Shares will be duly authorized and
validly issued; (ii) the Shares will be fully paid and nonassessable, and (iii)
issuance of the Shares is not subject to any preemptive rights.
 
     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the caption "Legal
Opinions" in the Joint Proxy Statement/Prospectus included as part of the
Registration Statement.
 
                                            Respectfully submitted,
 
                                            /s/ Squire, Sanders & Dempsey L.L.P.

<PAGE>   1
 
                                   EXHIBIT 21
 
                           SUBSIDIARIES OF REGISTRANT
 
<TABLE>
<CAPTION>
                                                                 NAME UNDER WHICH SUBSIDIARY
            SUBSIDIARY               STATE OF INCORPORATION             DOES BUSINESS
            ----------               ----------------------      ---------------------------
<S>                                  <C>                     <C>
The Citizens Banking Company         Ohio                    The Citizens Banking Company
The First National Bank of Chester   United States           The First National Bank of Chester
Freedom Financial Life Insurance     Arizona                 Freedom Financial Life Insurance
Company                                                      Company
Freedom Express, Inc.                Ohio                    Freedom Express, Inc.
</TABLE>

<PAGE>   1
 
                                  EXHIBIT 23.2
 
                      CONSENT OF DANIELSON ASSOCIATES INC.
 
     We hereby consent to the inclusion of our fairness opinion dated November
17, 1997 as an Exhibit to Century Financial Corp./Citizens Bancshares Proxy
Statement/Prospectus and to the references to our firm contained herein.
 
                                            DANIELSON ASSOCIATES, INC.
 
                                            By: /s/ ARNOLD G. DANIELSON
 
                                            ------------------------------------
                                            Arnold G. Danielson
 
Rockville, Maryland
February 27, 1998

<PAGE>   1
 
                                  EXHIBIT 23.3
 
                  CONSENT OF SANDLER O'NEILL & PARTNERS, L.P.
 
     We hereby consent to the inclusion of our opinion letter to the Board of
Directors of Citizens Bancshares, Inc. (the "Company") as Appendix E to the
Joint Proxy Statement/Prospectus relating to the proposed merger of Century
Financial Corporation with and into the Company contained in the Registration
Statement on Form S-4 as filed with the Securities and Exchange Commission on
the date hereof, and to the references to our firm and such opinion in such
Joint Proxy Statement/Prospectus. In giving such consent, we do not admit that
we come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended (the "Act"), or the rules and
regulations of the Securities and Exchange Commission thereunder (the
"Regulations"), nor do we admit that we are experts with respects to any part of
such Registration Statement within the meaning of the term "experts" as used in
the Act or the Regulations.
 
                                            SANDLER O'NEILL & PARTNERS, L.P.
 
                                            By: /s/
 
                                            ------------------------------------
 
March   , 1998

<PAGE>   1
 
                                  EXHIBIT 23.4
 
                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
     We consent to the incorporation by reference in this registration statement
of Citizens Bancshares, Inc. on Form S-4, of our report dated January 16, 1998
on the consolidated financial statements of Citizens Bancshares, Inc. as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997. We also consent to the reference to our firm under the
heading "Experts" in the prospectus, which is part of this registration
statement.
 
                                               /s/ CROWE, CHIZEK AND COMPANY LLP
                                               ---------------------------------
                                               Crowe, Chizek and Company LLP
 
Columbus, Ohio
February 27, 1998

<PAGE>   1
 
                                  EXHIBIT 23.5
 
                        CONSENT OF INDEPENDENT AUDITORS
 
     We consent to the use in this Registration Statement of Citizens
Bancshares, Inc. on Form S-4 of our report dated January 16, 1998 (relating to
the consolidated financial statements of Century Financial Corporation as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997) appearing as Appendix F in the Joint Proxy
Statement/Prospectus, which is part of this Registration Statement.
 
     We also consent to the reference to us under the heading "Experts" in such
Joint Proxy Statement/Prospectus.
 
                                               /s/ S. R. SNODGRASS, A. C.
                                               ---------------------------------
                                               S. R. Snodgrass, A. C.
Wexford, PA
February 26, 1998

<PAGE>   1
 
                                  EXHIBIT 99.1
                         CENTURY FINANCIAL CORPORATION
 
              PROXY FOR SPECIAL MEETING OF SHAREHOLDERS CALLED FOR
 
                                            , 1998
 
     The undersigned having received, together with the Joint Proxy
Statement/Prospectus dated             , 1998, notice of the Special Meeting of
Shareholders of Century Financial Corporation ("Century") to be held [April 15,
1998] at 11:00 a.m., hereby designates and appoints John M. Finley and James C.
Tosh as proxies for the undersigned, with full power of substitution, to
exercise all the powers that the undersigned would have if personally present to
act and to vote all of the shares that the undersigned is entitled to vote at
the Century Special Meeting, unless revoked, and at any adjournment or
postponement thereof, such proxies being directed to vote as specified below on
the following proposal:
 
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL 1 AND PROPOSAL 2.
 
PROPOSAL 1: To approve and adopt the Agreement and Plan of Merger by and between
            Citizens Bancshares, Inc. ("Bancshares") and Century, providing for
            the merger of Century with and into Bancshares.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
PROPOSAL 2: To approve the adjournment of the Century Special Meeting in order
            to allow the further solicitation of proxies.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR PROPOSAL 1 AND FOR PROPOSAL
2. ALL PROXIES PREVIOUSLY GIVEN ARE HEREBY REVOKED. RECEIPT OF THE ACCOMPANYING
JOINT PROXY STATEMENT/PROSPECTUS IS HEREBY ACKNOWLEDGED.
 
     The aforesaid proxies are hereby authorized to vote on any other matter
that may properly come before the meeting at their discretion. An executed proxy
may be revoked at any time prior to its exercise by submitting another proxy
with a later date, by appearing in person at the Century Special Meeting and
advising the Secretary of the shareholder's intent to vote the share(s) or by
sending a written, signed and dated revocation that clearly identifies the proxy
being revoked to the principal executive offices of Century, One Century Place,
Rochester, Pennsylvania 15074, attention: Anita J. Reese, AVP -- Administration
and Assistant Corporate Secretary. A revocation may be in any written form
validly signed by the record holder as long as it clearly states that the proxy
previously given is no longer effective.
 
Dated:
- -------------------------------------------------
                       ---------------------------------------------------------
                                          Signature
 
                                          --------------------------------------
                                          Signature
 
Please sign exactly as your name appears on your stock certificate(s) and return
this proxy promptly in the accompanying envelope. If the share(s) are issued in
the names of two or more persons, all persons should sign the proxy. If the
shares are issued in the name of a corporation or partnership, please sign in
the corporate name, by the president or other authorized officer, or in the
partnership name, by an authorized person. When signing as attorney, executor,
administrator, trustee, guardian or in any other representative capacity, please
give your full title as such.
 
PLEASE DATE, SIGN AND MAIL THIS PROXY TO CENTURY, ATTENTION ANITA J. REESE, ONE
CENTURY PLACE, ROCHESTER, PENNSYLVANIA, 15074. AN ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
 
WILL ____ WILL ____ NOT ATTEND THE CENTURY SPECIAL MEETING AND LUNCHEON TO BE
HELD [APRIL 15], 1998 AT 11:00 A.M. AT THE BEAVER VALLEY COUNTRY CLUB, PATTERSON
HEIGHTS, BEAVER FALLS, PENNSYLVANIA.

<PAGE>   1
 
                                                                    EXHIBIT 99.2
 
                           CITIZENS BANCSHARES, INC.
 
              PROXY FOR SPECIAL MEETING OF SHAREHOLDERS CALLED FOR
 
                                            , 1998
 
     The undersigned having received, together with the Joint Proxy
Statement/Prospectus dated             , 1998, notice of the Special Meeting of
Shareholders of Citizens Bancshares, Inc. ("Bancshares") to be held [April 14,
1998] at p.m., following adjournment of the Bancshares Annual Meeting of
Shareholders, hereby designates and appoints Marty E. Adams and James C. McBane
as proxies for the undersigned, with full power of substitution, to exercise all
the powers that the undersigned would have if personally present to act and to
vote all of the shares that the undersigned is entitled to vote at the
Bancshares Special Meeting, unless revoked, and at any adjournment or
postponement thereof, such proxies being directed to vote as specified below on
the following proposal:
 
MANAGEMENT RECOMMENDS A VOTE "FOR" PROPOSAL 1, PROPOSAL 2, PROPOSAL 3 AND
PROPOSAL 4.
 
PROPOSAL 1: To approve and adopt the Agreement and Plan of Merger by and among
            Bancshares and Century Financial Corporation ("Century"), providing
            for the merger of Century with and into Bancshares.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
PROPOSAL 2: To approve and adopt an amendment of the Bancshares Articles of
            Incorporation to increase the number of authorized Bancshares common
            shares to 36,000,000.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
PROPOSAL 3: To approve and adopt an amendment of the Bancshares Code of
            Regulations to increase the number of directors able to serve on the
            Bancshares Board of Directors to no fewer than nine (9) and no more
            than twenty-one (21) members and fix the size of the Board of
            Directors at twenty-one (21) members.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
PROPOSAL 4: To approve the adjournment of the Bancshares Special Meeting in
            order to allow the further solicitation of proxies.
 
         FOR ________         AGAINST ________         ABSTAIN ________
 
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR PROPOSAL 1, FOR PROPOSAL 2
AND FOR PROPOSAL 3 AND FOR PROPOSAL 4. ALL PROXIES PREVIOUSLY GIVEN ARE HEREBY
REVOKED. RECEIPT OF THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS IS HEREBY
ACKNOWLEDGED.
 
     The aforesaid proxies are hereby authorized to vote on any other matter
that may properly come before the meeting at their discretion. An executed proxy
may be revoked at any time prior to its exercise by submitting another proxy
with a later date, by appearing in person at the Bancshares Special Meeting and
advising the Secretary of the shareholder's intent to vote the share(s) or by
sending a written, signed and dated revocation that clearly identifies the proxy
being revoked to the principal executive offices of Bancshares at 10 East Main
Street, Salineville, Ohio 43945, attention: Tracey L. Reeder, Assistant
Corporate Secretary. A revocation may be in any written form validly signed by
the record holder as long as it clearly states that the proxy previously given
is no longer effective.
 
Dated:
- -------------------------------------------------
                       ---------------------------------------------------------
                                          Signature
 
                                          --------------------------------------
                                          Signature
 
Please sign exactly as your name appears on your stock certificate(s) and return
this proxy promptly in the accompanying envelope. If the share(s) are issued in
the names of two or more persons, all persons should sign the proxy. If the
shares are issued in the name of a corporation or partnership, please sign in
the corporate name, by the president or other authorized officer, or in the
partnership name, by an authorized person. When signing as attorney, executor,
administrator, trustee, guardian or in any other representative capacity, please
give your full title as such.
 
PLEASE DATE, SIGN AND MAIL THIS PROXY TO BANCSHARES, ATTENTION TRACEY L. REEDER,
10 EAST MAIN STREET, SALINEVILLE, OHIO 43945. AN ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.


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